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US Regulators Probing Bankrupt Crypto Hedge Fund Three Arrows Capital

  • CFTC, SEC probing a range of possible legal violations
  • Creditors say they’re owed billions of dollars after collapse

US regulators are prying deep into the remnants of failed hedge fund Three Arrows Capital as they try to untangle the fallout of this year’s crypto crash.

Three Arrows, which until recently was one of the industry’s most prominent firms, filed for bankruptcy in July after the broad sell-off in digital assets spurred in part by the collapse of the Terra blockchain. The Commodity Futures Trading Commission and the Securities and Exchange Commission are now looking into whether the money manager violated rules by misleading investors about the strength of its balance sheet and not registering with the agencies, according to two people familiar with the matter.