According to reports, US authorities are looking into Three Arrows Capital (3AC) in the wake of the firm’s prior bankruptcy.
Bloomberg reports that the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are looking into potential investor conduct violations by Three Arrows.
The regulators are explicitly investigating whether the company failed to register with the two organizations and deceived investors about its holdings. An inquiry is not currently under investigation, according to the SEC and CFTC. An unidentified source instead alerted Bloomberg of the purported probe.
Financial difficulties were first experienced by Three Arrows Capital when it lost money in May due to TerraUSD’s demise.
On June 27, the company missed a payment on a loan from Voyager Digital, and on June 29, it was given the go-ahead to sell off its assets. It declared bankruptcy a few days later, on July 1.
More controversy surrounded the case as the company’s founders abandoned their Singapore offices in July, left the nation, and skipped court appearances. Recent reports, however, imply that co-founder Zhu Su has only had limited contact with the judiciary.
Regulators in Singapore are already looking into 3AC. These regulators assert that the business surpassed its $250 million asset threshold and gave the company’s financial authority misleading information.
The company has also cooperated with court orders issued as part of its bankruptcy proceedings: the Singapore High Court has authorized liquidator Teneo to investigate the company.
The SEC and CFTC, two of the biggest financial authorities in the United States, have announced their investigations for the first time in today’s news. How this new discovery will impact the already complex case is still to be determined.
In the weeks that followed, as the token’s fall extended throughout the whole crypto market, 3AC was unable to fulfill margin calls from its lenders and ultimately declared insolvent.
Other Corporations that were affected by the market collapse included Celsius Network, Voyager Digital, and Vauld.