According to Bloomberg, American financial regulators have launched a joint investigation into the activities of the bankrupt cryptocurrency hedge fund Three Arrows Capital.
The Commodity Futures Trading Commission (CFTC) and the US Securities and Exchange Commission (SEC) are looking into whether the fund misled investors. Regulators are trying to assess whether the lack of registration with the CFTC and SEC was intentional in order to fraudulently raise funds from investors.
Recall that Singaporean hedge fund Three Arrows Capital filed for bankruptcy this summer. The company’s management explained this step with “extraordinary fluctuations in the cryptocurrency markets.” In addition, the fund lost significant funds during the collapse of the TerraUSD stablecoin and the entire Terra ecosystem.
“Agency did not comment on the information, but the investigation could lead to fines and other penalties for both the company and its management,” writes Bloomberg.
Lawyers suspect Three Arrows Capital founders Su Zhu and Kyle Davies of unwillingness to cooperate with regulators and escape – now their whereabouts are unknown.
Source: Bits
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