The crypto hedge fund Three Arrows Capital has been lined up for liquidation just days after it was accused of defaulting on a multimillion dollar loan to the crypto bank Voyager. The consultancy firm Teneo confirmed that two individuals from its British Virgin Islands offices had been appointed to oversee the liquidation, after Sky News broke the story. The Singapore-based firm is just the latest casualty in a string of financial failures caused by the crypto crash, started by the collapse of the “algorithmic stablecoin” Terra in May and the failure of the crypto bank Celsius earlier this month. Three Arrows Capital (3AC) had been deeply invested in a number of troubled cryptocurrency projects, including Terra, as well as Axie Infinity, a “play to earn” game that lost almost $700m (£577) to a hack from North Korea last year, and BlockFi, a centralised cryptocurrency exchange that laid off hundreds of staff in mid-June. It also had sizeable leveraged investments in bitcoin, Ethereum and other cryptocurrency assets, all of which have seen falls of up to 60% in the first half of 2022. Since the failure of Celsius began the second wave of the crypto crash, rumours have swirled that 3AC, which once managed more than $18bn of assets, was insolvent. Last week, Voyager revealed it had an outstanding loan of $650m to the hedge fund, more than four times its available cash. The bank had to freeze customer withdrawals and take out a multimillion-dollar loan from the founder of the cryptocurrency exchange FTX. On Monday, Voyager announced it was formally issuing a notice of default to 3AC “for failure to make the required payments on its previously disclosed loan of 15,250 bitcoin and $350m”. Stephen Ehrlich, chief executive officer of Voyager, said: “We are working diligently and expeditiously to strengthen our balance sheet and pursuing options so we can continue to meet customer liquidity demands.” 3AC did not reply to a request for comment. Carol Alexander, professor of finance at the University of Sussex Business School, said the value of investments in decentralised finance (DeFi – the industry term for projects built on top of the crypto asset system) had plummeted in recent months. “The default notice on Three Arrows served by DeFi platform Voyager yesterday is tipping Three Arrows into liquidation, and similar hedge funds are likely to follow,” she said. At the same time as 3AC heads into liquidation, CoinFLEX, a crypto exchange, is embroiled in a messy public battle with one of its investors, the venture capitalist Roger Ver, known in the sector as “Bitcoin Jesus” because of his early enthusiastic promotion of the project. CoinFLEX, which froze customer withdrawals on Friday citing a liquidity crisis, has accused Ver of personally owing the exchange $47m. “He has been in default of this agreement and we have served a notice of default,” said Mark Lamb, CoinFLEX’s chief executive. “He had a long track record of previously topping up margin and meeting margin requirements in accordance with this agreement. We have been speaking to him on calls frequently about this situation with the aim of resolving it. We still would like to resolve it.” In an oddly formatted tweet, Ver denied the accusation, and said that CoinFLEX actually owed him money. “Recently some rumors have been spreading that I have defaulted on a debt to a counter-party. These rumors are false. Not only do I not have a debt to this counter-party, but this counter-party owes me a substantial sum of money, and I am currently seeking the return of my funds.” In an effort to recover funds, the exchange has issued a new crypto token, which it promises will pay an annual interest rate of 20% to investors who buy and hold it. The company called the new token “Recovery Value USD”.