3AC was the first major cryptocurrency company to file for bankruptcy in 2022. 3AC, also known as Three Arrows Capital, had decided to sell NFT tokens to meet its obligations. Recently, the bankruptcy trustee came to the company and announced the NFTs to be used for the sale.
Does It Make Sense To Pay Debts With NFTs?
Considering that the company has a lot of NFTs in many collections, this seems to be a very logical option. These NFT tokens will be sold to pay 3AC’s debts.
Teneo, the liquidation company of Three Arrows Capital (3AC), said in a recent statement that the bankrupt company will start selling some of the NFTs it owns.
The purpose of the sale is to “liquidate the value of the NFTs for liquidation reasons,” Teneo said. The sale is expected to begin within the next month.
Which Collections Will Be Offered For Sale
The NFTs being offered for sale include collections such as CryptoPunks, Bored Ape, Otherdeeds and Autoglphy.
The liquidation company said the sale will not affect NFTs in the Starry Night portfolio and that they are “the subject of an application before the Eastern Caribbean High Court of Justice in the British Virgin Islands.”
More than 300 NFTs in the Starry Night portfolio were moved to a Gnosis Secure address in October 2022. The portfolio was controlled by Starry Night Capital, a subsidiary of 3AC, which was formed in 2021 with the help of NFT collector Vincent Van Dough and specialized in NFTs.
Why Did 3AC Go Bankrupt?
3AC was one of the largest crypto firms in its heyday, managing about $18 billion in crypto assets. Its early investments in successful technologies like Ethereum (ETH) and Avalanche (AVAX) allowed it to amass this huge sum. The failure of LUNA and the algorithmic stablecoin UST led to the bankruptcy of the hedge fund. Indeed, it would not be wrong to say that crypto exchanges are facing the same problem. Since 3AC had too much room to maneuver on a single coin, it had to take a path that, over time, led to the death of that coin. Even if it was not UST, this could have happened with another coin because it adopted that system.
3AC had significant stakes in both of these properties, which were worth about $560 million at their peak, and about $600 when the price dropped to almost zero in a matter of days.
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