The Facts
A British Virgin Islands court has ruled that Singapore-based crypto hedge fund Three Arrows Capital (3AC) has become insolvent and must liquidate its assets.
The ruling came just days after the fund was accused of defaulting on payments of a loan valued at over $665M that was issued to it by the crypto bank Voyager Digital.
The Spin
Narrative A
We are still in the early stages of "Crypto Winter." The total market value of all crypto assets has shrunk to under $1T - from a high of over $3T just a few months ago. Many lower-level exchanges are already insolvent at these prices, they just haven't admitted it yet. As in most cases of financial collapse, the burden will fall most heavily on retail investors.
Narrative B
Some players in the crypto space were clearly over-leveraged and under-capitalized, but one person's tragedy is another's profit. Investment banking giant Goldman Sachs has been in talks with investors to raise capital for a fund to snatch up distressed crypto assets at a discount. The smart money sees this crisis as an opportunity.