One of the many unanswered questions about the bankrupt crypto hedge fund Three Arrows Capital is what will happen to the firm’s huge collection of NFTs. But answers might be on the way because the assets are now being moved to a new wallet.
According to a tweet from crypto analytics company Nansen, Starry Night Capital’s NFTs are currently being transferred into a Gnosis Safe account. Three Arrows Capital and pseudonymous collector Vincent Van Dough formed Starry Night Capital as a fund in 2021.
An extra secure Ethereum wallet called a Gnosis Safe needs multiple signatures to approve transactions. As of the time of writing, 80 Ethereum NFTs were still present in the old wallet, while a total of 383 NFTs have been transferred across. Last night, the majority of the NFTs were transferred.
NFTs previously collected by Starry Night Capital are moving to a Gnosis Safe address.
— Nansen
These NFTs include:
– Pepe the Frog NFT Genesis, sold for 1,000 ETH (~$3.5M) on Oct 5, 2021
– Fidenza #718, sold for 240 ETH (~$1.1M) on Nov 13, 2021
Some other notable NFTs belowpic.twitter.com/8PU13CqMnn
(@nansen_ai) October 4, 2022
In August 2021, Three Arrows and Vincent Van Dough announced the creation of the $100 million Starry Night fund. After that, they went on a spending binge and bought a variety of expensive Ethereum assets. After purchasing an Art Blocks Ringers NFT from artist Dmitri Cherniak for $5.66 million in ETH, the fund made its public debut.
Other famous NFTs acquired by Starry Night Capital include a trio of NFTs by anonymous artist XCOPY that sold for between $1.4 million and $2.3 million worth of ETH, as well as the Pepe the Frog Genesis NFT by artist Matt Furie, which sold for $3.5 million worth of ETH. Numerous CryptoPunks, Rare Pepes, and other important collectibles are also kept at Starry Night.
It’s unknown if Starry Night managed to raise and use the entire $100 million allocated for the fund. A dashboard on the data platform Dune claims that Starry Night spent around $35 million worth of ETH, yet the Pepe the Frog NFT is not included in the list of tracked assets.
Moreover, some of the NFTs are single-edition works of art or a part of collections with low liquidity, making it difficult to assign a current value to them. The total value of the more liquid assets, according to Nansen, is 625 ETH, or roughly $846,000, but he also pointed out that over 89% of the NFTs have low liquidity. Compared to their initial acquisition values, several of the assets seem to have received relatively low valuations.
Since its peak last fall, the NFT market has lost a large amount of value overall. The estimated value of several “blue chip” NFT assets dropped precipitously in May when the cryptocurrency market began to collapse. Similar to how the entire market trading activity has decreased recently, several million NFTs continue to sell each month, albeit frequently at lower price points.
Before it abruptly failed in May as a result of the sharp decrease of Terra’s LUNA and UST tokens and their ripple effects on the larger crypto ecosystem, Three Arrows Capital was one of the most well-known crypto hedge funds. Su Zhu and Kyle Davies, the company’s founders, attributed its problems on exposure to Terra, staked Ethereum, and the Grayscale Bitcoin Trust.
Creditors claimed that Three Arrows’ Singapore office had been abandoned and that the company’s founders were absent after the company filed for Chapter 15 bankruptcy in June. Following its demise, the corporation claimed that it owed creditors $3.5 billion, with Zhu purportedly owning a $1.4 billion share in the offshore fund that housed the company’s assets.
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