SEC, CFTC Are Examining Three Arrows Capital

T

he federal agencies are investigating whether Three Arrows misled investors about its balance sheet and whether the hedge fund should have registered with them.

According to two people familiar with the matter, Bloomberg reported that the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) are investigating if Three Arrow Capital, a crypto hedge fund currently in bankruptcy, violated any rules by providing false information about its balance sheet to investors and failing to register with said agencies.

Three Arrows, a Singapore-based hedge fund, filed for bankruptcy in July after experiencing substantial losses from cryptocurrency market fluctuations. In particular, the company lost a large sum of money when the terraUSD algorithmic stablecoin collapsed in May. At the end of June, Three Arrows Capital was reprimanded by the Monetary Authority of Singapore (MAS) for allegedly providing false information.

With the co-founders of Three Arrows, Su Zhu and Kyle Davies, being untraceable, the liquidators recently asked the court if they could serve subpoenas to them via their email addresses, Twitter accounts, and the email address of their attorneys.

Mike

An editor at Coincrop

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Mike is a Coincrop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely putting his latest car project back together.