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The Wall Street Journal: Court orders liquidation of crypto hedge fund Three Arrows

A British Virgin Islands court ordered the liquidation of Three Arrows Capital Ltd. after creditors sued the cryptocurrency hedge fund for failure to repay debts.

Nichol Yeo, a partner at law firm Solitaire LLP, said Three Arrows Capital is considering its options and seeking legal advice in the British Virgin Islands. 

Three Arrows Capital suffered losses in recent weeks due to a punishing decline in the value of cryptocurrencies. Twin forces have hit the digital asset ecosystem: a broad market selloff sparked by the Federal Reserve’s interest-rate increases and concerns over individual crypto coins and firms. Bitcoin’s dollar value has fallen by more than a third this month.

Two executives from the global advisory firm Teneo were appointed by the British Virgin Islands to oversee the liquidation of assets and safeguard them, according to people familiar with the proceedings. The executives, senior managing directors Russell Crumpler and Christopher Farmer, joined Teneo after the company acquired financial firm KPMG’s Cayman and British Virgin Island’s restructuring business in January, according to Teneo’s website.

Creditors to whom Three Arrows owes debts will be able to file their claims online, the people said. The process for debtors to reclaim their assets is likely to be lengthy, they said, noting the liquidation order would mark the start of that process.

An expanded version of this report appears on WSJ.com.

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