The Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) are examining whether bankrupt crypto hedge fund Three Arrows Capital violated rules by misleading investors about its balance sheet and not registering with the two agencies, Bloomberg reported, citing two people familiar with the matter.
The Singapore-based Three Arrows filed for bankruptcy in July, saying its business had “collapsed in the wake of extreme fluctuations in cryptocurrency markets.” In particular, the hedge fund suffered huge losses stemming from the collapse of the terraUSD algorithmic stablecoin in May. At the end of June, the Monetary Authority of Singapore (MAS) reprimanded Three Arrows Capital for misleading it with allegedly false information.
The CFTC didn’t immediately respond to a request for a comment on the report.
With Three Arrows’ co-founders Su Zhu and Kyle Davies’ location unknown and the liquidators in the bankruptcy case and their attorneys unable to track them down, the liquidators recently asked the court to be able to serve the two subpoenas via their email addresses, Twitter accounts and the email addresses of their attorneys.
DISCLOSURE
Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.