Court Documents Show That Three Arrows Capital (3AC) Owes Moonbeam Foundation More Than $27 Million

  • The document also showed that Moonbeam engaged 3AC as a ‘consultant’ for its tokens.

New court documents reveal that crisis-laden crypto hedge fund, three arrows capital (3AC), is in another debt of more than $27 million to blockchain development lab, Moonbeam foundation. The amount consists of $10 million in Moonbeam-issued tokens, $7 million in USDC, and more than $10 million USDT stablecoins.

3AC and Moonbeam’s Costly Relation

Last month, Moonbeam director Aaron Evansa wrote to 3AC demanding loan repayment. The two crypto firms signed the loan agreement last September, with the fund borrowing the loan at a 12 percent interest rate. 

In a separate agreement, Moonbeam engaged 3AC as a liquidity consultant for its Moonriver (MOVR) and Glimmer (GLMR) tokens.

Moonbeam is a Polkadot-built smart contract network that enables interoperability between Ethereum networks and Polkadot. The court document shows that 3AC owes Moonbeam 200,000 MOVR tokens and 10 million GLMR tokens.

As of Friday, July 15, 2022, 3AC has yet to return these tokens to Moonbeam. Current market rates estimate the value of both tokens to be about $10 million. As a liquidity consultant for Moonbeam, 3AC’s primary responsibility was to make the GLMR and MOVR tokens “commercially viable in new markets.”

Moonbeam expects 3AC to perform market research and new but suitable exchanges to list those tokens. However, 3AC won’t share any blame or take any credit for the performance of these tokens. Also, Moonbeam didn’t give 3AC any particular trading volume targets.

The only target Moonbeam gave 3AC was to make the GLMR and MOVR commercially viable. Then, it is to suggest the best ways to enhance their liquidity. The documents also reveal that 3AC received a total of $90,000 from Moonbeam for its consultancy services. Moonbeam paid the amount in various installments over six months.

Crisis at Hand

3AC has been actively investing in various crypto sectors in the last couple of years. It has investments in layer-1 blockchain companies, non-fungible tokens (NFTs), decentralized finance (DeFi), and other crypto-related firms.

However, the fund started having issues following the terra network crash in mid-May 2022. Then, the worsening crypto market conditions forced the company to file a Chapter 15 bankruptcy at a New York court earlier this month.

Before the bankruptcy filing, a British Virgins Island (BVI) court had ordered the liquidation of 3AC’s assets. The court also appointed bankruptcy trustee, Teneo, to take charge of the liquidation process. However, Teneo has accused 3AC’s co-founders of not cooperating with the process.

No one knows the whereabouts of Su Zhu and Kyle Davies (the 3AC co-founders). Hence, they haven’t assisted Teneo in performing their duties as ordered by the court. 

Another crypto firm affected by 3AC’s insolvency issues is the crypto lender Voyager Digital. The crypto lender recently made a Chapter 11 bankruptcy filing, contrasting the chapter 15 filing made by 3AC.

 For perspective, a Chapter 11 bankruptcy filing protects a company’s assets in the US. However, a chapter 15 filing protects a company’s assets within and outside the US.

Rebecca Davidson Verified

Rebecca is a Senior Staff Writer at BitcoinWisdom, working hard to bring you the latest breaking news in the cryptocurrency market. In the words of Elon Musk “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”

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