Sky News has learnt that partners from Teneo in the British Virgin Islands has been lined up to handle the insolvency of the Singapore-based firm, which was set up in 2012 by Su Zhu and Kyle Davies.

Cryptocurrency insiders said on Wednesday that the liquidation would be a significant moment in the current unravelling of the cryptocurrency sector, which has grown at breakneck speed in recent years.

It was unclear what the immediate financial implications would be for Three Arrows' creditors.

The firm's demise is likely to raise further questions, however, about the regulatory oversight to which cryptocurrencies and other digital assets are subject in the world's major financial centres.

The crisis at Three Arrows Capital was highlighted earlier this month when Voyager Digital, a crypto broker, said it was considering issuing a default notice in relation to a loan worth hundreds of millions of dollars.

The crypto landscape is experiencing tumultuous change amid a collapse in valuations of assets such as stablecoins - digital currencies pegged to the value of assets such as the US dollar or gold.

Mr Davies told the Wall Street Journal in an interview this month that it was "committed to working things out and finding an equitable solution for all our constituents".

He added that Three Arrows was exploring options such as the sale of assets or a rescue by another firm.

It was unclear whether such conversations were continuing on Wednesday, or whether some form of sale of Three Arrows' assets by its liquidators remained possible.

A person familiar with the situation confirmed that a court order in the BVI had been made on June 27 to liquidate Three Arrows.

Three Arrows Capital did not respond to an emailed request for comment, while Teneo was contacted for comment.