In wake of Three Arrows Capital’s multi-billion-dollar bankruptcy filing last year, the firm behind the company’s liquidation process ‘Teneo’ has announced that it will be selling a portion of the company’s extensive NFT portfolio in the coming month.
Three Arrows Capital first planned to accumulate a whopping $100 million NFT collection in August 2021, with the establishing of the ’Starry Night Capital’ fund helping facilitate the landmark purchases. Here, pseudonymous NFT figure Vincent Van Dough was given the responsibility of assembling the fleet of Blue-Chip assets, with the collector opting for NFTs from prominent collections such as Art Blocks, CryptoPunks, and Rare Pepe.
That being said, only a third of the $100 million commitment was fulfilled in practice, as the company was only able to acquire an estimated $35 million worth of NFTs before filing for bankruptcy in June (after accumulating a staggering $3.5 billion worth of debt).
Four months down the line, Teneo- a public relations and advisory firm that the court had appointed to handle Three Arrows Capital’s liquidation- then seized control over the company’s NFT portfolio, with the firm releasing a statement today to issue its intent to sell the assets as part of the firm’s liquidation process.
However, in putting a dampened on the progress made, Teneo stated in the announcement that the high-end NFTs from the Starry Night Capital fund won’t be included in this round of liquidations, as instead, the assets are subject to “an application before the Eastern Caribbean Supreme Court in the High Court of Justice in the British Virgin Islands”- essentially meaning they’re unable to be sold at this moment in time.
With regards to the select amount of assets that are able be sold, these are set to go up for sale in the next 28 days- where per the words of Teneo senior managing direct Christopher Farmer, the purpose of the sale is to simply “realize the value of the NFTs for the purposes of the liquidation”. Such assets include those from Blue-Chip collections such as CryptoPunks, Bored Ape Yacht Club (BAYC), Fidenzas, and Ringers.
Per data from Zerion, the value of such assets sits at around $9 million (based on current floor prices). With regards to the remaining NFTs held by Teneo, these are thought to be worth around $11.5 million, meaning the overall valuation of the to-be-sold NFTs stands at around $21 million.
In addition, Three Arrows Capital still owns other NFTs worth a collective amount of $2.4 million- which again, is a figure that pales in comparison to the firm’s $3.5 billion worth of debt.
In adding even more insult to injury, the ongoing bear market has meant that such valuations are in sharp contrast to those of this time last year (i.e., the time of purchasing)- where for context, Three Arrows Capital reportedly paid over $5.6 million (in Ethereum) for Ringer #879. This may also mean that selling the NFTs for prices in which satisfy the liquidators may also be difficult.
The Open Exchange by Three Arrows Capital
To try and elevate pain for its investors, the Three Arrows Capital founders (Zhu Su and Kyle Davies) have announced a new platform called the’ Open Exchange’ earlier this month. Here, the platform aims to serve as the “world’s first public marketplace for crypto claims trading and derivatives”- including those from Three Arrows Capital.
Made in partnership with the co-founders of crypto exchange CoinFlex, the Open Exchange hopes to help “desperately searching” claimants recoup money that they’ve lost from bankrupt crypto firms- such as the infamous FTX, Celsius Network, Voyager Digital, Genesis, Mt.Gox, BlockFi, and of course, Three Arrows Capital.
The exchange pledges to offer users the ability to monetise claims by providing a marketplace for their trading, with the market in question said to be worth $20 billion. Through the involvement of CoinFlex, the exchange’s $FLEX token will be the “primary token” of the Open Exchange.
In wake of the platform’s announcement- which was made via a thread on Su’s personal Twitter account- its waitlist spots have been opened for joining, whilst the site’s user experience and interfaces will be launched in beta “very soon”.
Within the same thread, Su outlined the difficulties he and the Three Arrows Capital team had faced throughout 2022, where in doing so, he describes the months of June and July as ‘total darkness’ for himself, Kyle, and of course, the platform’s creditors.
Despite efforts to explain the regretful downfall of the platform and the rationale behind its team’s decisions, the thread was largely met with backlash from the community, with cries of Su ‘playing the victim card’. Perhaps taking the insults even further, some users replied by saying Su had “lost all rights to work in this industry again,” and the Open Exchange is simply a “new scam”.
