Surprise NFT Purchase by Bankrupt Hedge Fund
In a peculiar turn of events, a wallet associated with bankrupt crypto hedge fund Three Arrows Capital (3AC) has successfully purchased a Non-Fungible Token (NFT) despite the firm's ongoing liquidation proceedings.
Overlooked Bid from Years Past
On August 21, 2021, before 3AC filed for bankruptcy, its wallet placed a bid of 20 ETH (approximately $58,800 at the time) for the "Neon Village" NFT from the "Ninja Village" collection by artist SeerLight on the SuperRare NFT marketplace.
Acceptance and Confirmation
On Friday morning, the bid was accepted by the NFT's previous owner, "@anonymoux," who had initially purchased it for 100 ETH (approximately $348,700 at the time) in October 2021. This transaction was confirmed on the Ethereum blockchain explorer Etherscan.
Liquidators Missed the Bid
Teneo, the company handling the liquidation of 3AC's estate, reportedly missed the bid, allowing it to be accepted despite the firm's bankruptcy status.
Escrowed ETH
"3AC made an offer on SuperRare, and the ETH was placed in escrow within the smart contract," explained Jean-Michel Pailhon, CIO of Grail Capital and a former Ledger executive. "Therefore, the funds were not visible as retrievable assets during the liquidation process."
Previous NFT Sale
In March 2023, Mechanism Capital co-founder Andrew Kang acquired the original Pepe the Frog NFT from the 3AC estate for an undisclosed amount.
3AC Implosion
3AC, a once-prominent crypto hedge fund managing assets worth over $3 billion, filed for Chapter 15 bankruptcy in July 2022 due to liquidity issues following the collapse of the Terra ecosystem.
Aftermath
3AC's co-founders, Kyle Davies and Su Zhu, subsequently launched Open Exchange (OPNX), a crypto derivatives and claims trading platform. However, the platform closed down in February 2023.
Zhu was arrested in Singapore but was released in December. Davies remains outside of Singapore to avoid potential imprisonment.
Disclaimer
This article is provided for informational purposes only and does not constitute legal, tax, investment, financial, or other advice.