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According to the latest reports, bankrupt cryptocurrency hedge fund Three Arrows Capital has managed to sell seven NFTs from its expansive collection. Sotheby’s, the well-known fine arts auction house, announced the news while confirming that the seven NFTs sold for a whopping $2.5 million.
Background to the NFT Sale
Three Arrows Capital (3AC) is a Singapore-based crypto hedge fund that filed for bankruptcy in June last year. It was one of the first and worst-hit firms during the crypto winter amidst the astronomical fall of LUNA and TerraUSD. At that time, 3AC held around $1 billion worth of assets with close to $22 million worth of NFT collection.
3AC subsequently went into the liquidation phase, and Teneo, the court-appointed liquidator, recently announced its intent to sell certain NFTs from 3AC’s collection. However, Teneo also confirmed at the time that the sale would not include 3AC’s Starry Night portfolio which is currently under the disputed category as per the court.
A Deep Dive into the Auction
Sotheby’s recently launched the NFT sale of its ‘Grails’ collection, which features 3AC’s asset portfolio. The tokens on sale included – Dmitri Cherniak Ringers #879 (The Goose), Snowfro full spectrum Chromie Squiggle #1780, Tyler Hobbs’ small-scale Fidenza #725, Larva Labs’ Zombie, CryptoPunk #6649 and Autoglyphs.
Tyler Hobbs’ small-scale Fidenza #725 fetched the highest amount of $1 million in the auction. 3AC purchased the same for 135 ethers in 2021, which amounted to approximately $341,000.
In a detailed catalog description, Sotheby’s summarized the collection as the best representation of contemporary digital art and the generative era. It added, “This momentous occasion marks a significant event in history as Sotheby’s brings together blue-chip–quality works from prominent series, exceptional arrays of works by individual creators, and rare works hitherto virtually unseen on the public market. Overall, this selection represents a fascinating exploration of the intersection of art and technology and offers a unique perspective on the potential of algorithmic art to push the boundaries of creativity in the digital age.”
Sotheby’s also confirmed that the entire collection will release in phases through private sales as well as public auctions. However, the recent auction that fetched $2.5 million is the first step in 3AC’s liquidation journey.
Commenting about the importance of this event, Michael Bouhanna, Sotheby’s Head of Digital Art and NFTs said, “This expansive collection marks an important moment in the rise of generative art on the blockchain in 2021, guided by the 3AC ethos of acquiring the some of the highest quality and rarest works available on the market. Since that defining moment, when digital art and NFTs became a genuine pop culture phenomenon, generative art has continued to gain attention from a growing audience, including major international institutions. The emergence of this collection marks a significant opportunity for collectors to celebrate the pioneering generative artists who helped bring the form to this wider audience and continue to push it forward.”
The Way Forward for Three Arrow Capital
As per the reports, liquidators have secured $35.6 million from 3AC’s bank accounts. However, it still owes billions of dollars to its investors and creditors. The recent $2.5 million auction round has come as a sign of relief for 3AC founders Kyle Davies and Su Zhu, as they will likely feel slightly more confident about repaying close to $3.5 billion to the 3AC investors.
After the auction, Davies seemed quite optimistic about 3AC’s existing position, as he tweeted, “NFT grails mooning on Sotheby’s, WorldCoin scanning millions of eyeballs, Aptos the next Solana. 3AC Portfolio is on fire.” On the other hand, co-founder Su Zhu commented, “Sent a few of them the Sotheby’s auction results, and the response is *crickets* in response to journalist inquiries on the liquidity of the NFTs.” However, the comments did not go down very well with the crypto community as some members urged them to focus on repaying investor losses.
According to the latest reports, the 3AC founders have launched a new venture named OPNX exchange, a cryptocurrency exchange aimed to trade claims for troubled crypto firms. CoinFlex co-founder, Mark Lamb has also joined forces with Davies and Zhu in this stint.
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