After weeks of speculation that 3AC was functionally insolvent, the crypto hedge fund finally filed for Chapter 15 bankruptcy in Southern New York late Friday. A British Virgin Islands court had already ordered the Three Arrow’s British Virginia branch to go into liquidation which indicates that Friday’s filing might be linked to this as chapter 15 filings are generally tied to foreign legal proceedings.

The U.S.-based financial firm, Teneo Restructuring has been mandated to oversee the assets sales and liquidation process and financial regulators issued a stern reprimand of the hedge fund firm on Thursday.

Three Arrow Chapter ran into a heavy financial debacle after borrowing large amounts of crypto assets from several crypto lenders including Blockfi, Celsius, Babel Finance, and Voyager and not being financially able to refund.

The lenders who were seriously affected by this payment problem had to stop withdrawals and/or need to extend credit lines to weather the storm.

Law firm Latham and Wilkins LLP is representing 3AC according to court documents, 3AC is actively pursuing the protection of its US-based assets amidst the BVI court proceedings.

The documents have also revealed that one of 3AC’s creditors has already initiated arbitrary proceedings against the firm, and is currently seeking some form of emergency relief to seize or conserve 3AC assets or freeze the debtor’s assets pending arbitration of its claims.

The creditor filing the proceedings remains unnamed although they have been disclosed as having begun those proceedings in New York City. The arbitration has however stayed according to the petition as the liquidation process has begun and will likely continue in the current economic climate.

Featured image source: Decrypt