Major cryptocurrency hedge fund Three Arrows Capital Ltd. has been ordered to liquidate by a British Virgin Islands court.

The court order was issued on June 27, according to a report from Sky News, which cites sources close to the matter. The move comes after creditors sued the company following its default on debts in the midst of a crypto markets crash.

Three Arrows Capital’s potential insolvency has been under the microscope in recent weeks after the firm invested in multiple parts of the crypto market that have seen significant declines over the year. This has included a major investment in the Terra crypto ecosystem and its sister currency Luna, which fell into a death spiral where it lost 99% of its value in May.

On Monday, the digital asset brokerage firm Voyager Digital Ltd. issued a notice stating that Three Arrows Capital failed to repay a loan of worth more than $670 million. According to the company, the loan was approximately $350 million in U.S. dollar-pegged stablecoin, USDC, and 15,250 bitcoin, at about $323 million at today’s prices.

In the statement, Voyager Digital said that it had reduced its daily withdrawal limits for customers but would still “operate and fulfill customer withdrawals.”

Three Arrows Capital is a nearly decade-old hedge fund started by currency traders Su Zhu and Kyle Davies. It’s said to have had nearly $3 million in assets as of April of this year, before the Luna crash.

All this comes amid a “crypto winter” that has brought on a downturn in markets, dropping bitcoin to below $17,947 during mid-June with a bounce back to above $20,000. Even then, that represents a 36% drop from a high of $31,500 near the beginning of June. Other cryptocurrency markets have suffered similar downturns during the month as well.

In an interview with the Wall Street Journal, Davies said that the firm was seeking remedies such as asset sales or rescue by another firm.

The insolvency of Three Arrows Capital has caused a ripple effect across the crypto industry as reflected across numerous exchanges and different industry actors.

The crypto staking and yield platform Finblox imposed a withdrawal limit and paused rewards in mid-June, citing the impact of Three Arrows Capital’s insolvency. Babel Finance, a crypto financial services provider for institutional investors, announced on its website that it was suspending withdrawals, citing “unusual liquidity pressures” and “conductive risk events.”

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