Bankrupt 3AC Capital Buys NFT Amidst Liquidation

• 3AC’s wallet successfully purchased a “Neon Village” NFT for 20 ETH ($60,000) during liquidation proceedings.
• The bid was placed in August 2021 and overlooked by Teneo, the company handling the liquidation.
• 3AC filed for Chapter 15 bankruptcy in July 2022 due to liquidity issues following the collapse of the Terra ecosystem.
• The incident highlights the need for better oversight and management of assets during liquidation proceedings.
• The fate of 3AC’s NFT collection remains uncertain.

In a surprising turn of events, the bankrupt crypto hedge fund Three Arrows Capital (3AC) has made headlines once again. Despite being in the midst of liquidation proceedings, the firm’s wallet successfully purchased a Non-Fungible Token (NFT) from the “Neon Village” collection by artist SeerLight. This NFT was acquired for 20 ETH (approximately $60,000) on the SuperRare NFT marketplace, thanks to a bid placed back in August 2021.

The Missed Bid: A Tale of Oversight

The story behind this purchase is nothing short of intriguing. The bid, placed by 3AC’s wallet before the firm filed for bankruptcy, was overlooked by Teneo, the company handling the liquidation of 3AC’s estate. As a result, the bid was accepted by the NFT’s previous owner, “@anonymoux,” who had initially purchased it for 100 ETH (approximately $348,700) in October 2021.

Jean-Michel Pailhon, CIO of Grail Capital and a former Ledger executive, shed light on the situation: “3AC made an offer on SuperRare, and the ETH was placed in escrow within the smart contract.” This oversight allowed the bid to be accepted, despite the firm’s bankruptcy status.

3AC’s Financial Woes

3AC, once a prominent crypto hedge fund managing assets worth over $3 billion, filed for Chapter 15 bankruptcy in July 2022. The firm’s downfall was primarily due to liquidity issues following the collapse of the Terra ecosystem. The acquisition of the Neon Village NFT, however, raises questions about the oversight of the liquidation process and the management of 3AC’s assets.

Implications for the NFT Market

This unexpected purchase by a bankrupt firm has left many in the NFT community bewildered. The incident highlights the need for better oversight and management of assets during liquidation proceedings. It also underscores the volatile and unpredictable nature of the NFT market, which continues to experience significant fluctuations in value and investor sentiment.

The Future of 3AC’s NFT Collection

The fate of 3AC’s NFT collection remains uncertain. In March 2023, Mechanism Capital co-founder Andrew Kang acquired the original Pepe the Frog NFT from the 3AC estate for an undisclosed amount. As the liquidation process continues, it remains to be seen how the rest of the firm’s NFT collection will be handled and whether further oversight issues will arise.