The Commodity Futures Trading Commission and the Securities and Exchange Commission have launched an investigation into whether crypto hedge fund Three Arrows Capital, which filed for bankruptcy back in July, misled investors, according to a report by Bloomberg.

The Commodity Futures Trading Commission and the Securities and Exchange Commission have launched an investigation into whether crypto hedge fund Three Arrows Capital, which filed for bankruptcy back in July, misled investors, according to a report by Bloomberg.

The report cites unnamed sources as revealing that the regulators' focus is on whether the Singapore-based fund over-stated the strength of its balance sheet and did not register with agencies.

If the SEC and CFTC probe uncovers wrongdoing, monetary fines and other penalties are likely to be issued against both the firm and the individuals involved.

3AC was forced into liquidation after failing to meet margin calls from its lenders following the collapse of the Terra blockchain project which failed after the TerraUSD stable coin crashed in May.