Three capital stocks under investigation by SEC, CFTC: Report

Important Takeaway

  • The CFTC is investigating bankrupt Three Arrows Capital, according to a Bloomberg report.
  • The company reportedly misled investors about its balance sheet and failed to register with regulators.
  • The investigation has not been officially confirmed. Bloomberg obtained reports from an unnamed source.

US regulators are said to be investigating Three Arrows Capital (3AC) following the company’s previous bankruptcy.

Regulatory probe and object 3AC

Three Arrows Capital is under investigation.

According to Bloomberg, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are investigating whether Three Arrows has violated certain rules regarding investor behavior.

Specifically, regulators determine whether the company misled investors about its balances and failed to register with the agencies.

The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have not confirmed that an investigation is underway. Instead, Bloomberg was informed of the supposed investigation by an unnamed source.

Three Arrows Capital first ran into financial trouble when it lost money during the TerraUSD crash in May.

The company defaulted on a loan from Voyager Digital on June 27 and ordered an asset liquidation on June 29. Days later, on July 1, the company declared bankruptcy.

The case sparked further controversy when the company’s founders left their offices in Singapore in July before fleeing the country and not appearing in court. But recent reports indicate that co-founder Zhu Su has handled the courts with limited capacity.

Three Arrows Capital is already under investigation by regulators in Singapore. These regulators allege that the company provided false information to the company’s monetary authority and its assets exceeded the management threshold of $250 million.

The company also complied with the orders as part of the bankruptcy proceedings: liquidator Teneo was given permission to investigate the company by the Singapore Supreme Court.

But today’s news marks the first report of investigations by two of the largest US financial regulators – the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It remains to be seen how this new development will affect the already occupied state.

Disclosure: At the time of writing, the author of this article owns BTC, ETH, and other cryptocurrencies.

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