The Commodity Futures and Trading Commission and the Securities and Exchange Commission are investigating cryptocurrency hedge fund Three Arrows Capital to determine whether it misled investors about its balance-sheet strength and was not registered with the agencies, Bloomberg reported Monday, citing two people with knowledge on the matter. Singapore-based 3AC filed for bankruptcy during the summer amid turbulent market conditions at the time. Its collapse was fueled by the multi-billion dollar meltdown of the Terra blockchain in May, in a move that hampered the broader crypto market thereafter. The formerly prominent hedge fund faced a number of outsized margin calls from lenders that it could not meet, thus declaring bankruptcy. The agencies could impose certain penalties if legal violations were found. Both the SEC and CFTC, though, did not immediately respond to a request for comment by Seeking Alpha. Previously, (July 12) 3AC founders nowhere to be found.
