The Reprimand: MAS Takes Action
The Monetary Authority of Singapore (MAS) didn’t take kindly to Three Arrows Capital (3AC) misadventures in finance. In a recent revelation, they slapped the hedge fund with a reprimand for providing some rather dubious information. Imagine a teacher catching a student trying to sneak a deer-in-the-headlights glance at a classmate’s exam!
Specifically, 3AC has been found in violation of capital requirements, flaunting assets under management that reached well beyond the permitted limits. Remember the good old days when ‘broke’ was just about being flat broke? That’s not how their bank accounts are looking right now!
From Golden Days to Rough Seas
Established in 2012, 3AC was sprouting like a weed in Singapore’s hedge fund festival. Originally permitted to manage funds for a maximum of 30 investors, capped at $180 million, they seemed to be cruising toward financial glory.
But the hedge fund world is as fickle as a cat on a hot tin roof. As Bitcoin plummeted from dizzying heights of more than $60,000 to around $20,000, 3AC found itself along for a ride on the market rollercoaster—with no seatbelt. Their fortunes dipped faster than you can say “margin call.”
Liquidation: The Final Chapter?
When financial woes mount, things get really hairy. Reports earlier this month laid bare that 3AC might be on the brink of insolvency after facing a whopping $400 million in liquidations. It’s like finding your favorite snack missing; only this time, the fridge is empty because it was raided by bears (the market kind, not the cuddly ones).
The firm’s misstep in fulfilling margin calls from lenders during a severe market downturn marked their first failure in two years. When BlockFi, a cryptocurrency lending firm, snapped out Bitcoin handouts to 3AC, the outcome was less than glamorous as it couldn’t handle the margin demand. Ouch!
A Court’s Judgement: Liquidation is Here
The stakes couldn’t get higher when liquidations hit a tipping point, resulting in a court in the British Virgin Islands ordering a liquidation of 3AC. The same day, Voyager Digital, another player in this financial saga, delivered a notice of default demanding hefty sums in Bitcoin and USDC. Talk about having the stakes raised like a couple of angry poker players!
Amidst Chaos: The Company Responds
Even with the storm raging and rumors of bankruptcy swirling, 3AC’s founders refuse to bury their heads in the sand. Instead, Kyle Davies has made it emphatically clear that they’re on a mission to resolve the situation—swimming against the tide, if you will. With legal and financial consultants onboard, they’re brainstorming solutions, considering everything from asset sales to rescue packages. Cross your fingers for a fairytale ending—because who doesn’t love a good financial comeback story?
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