Court Freezes $1 Billion in Assets of Three Arrows Capital Founders
Founders of the collapsed crypto hedge fund, Three Arrows Capital, have had $1 billion in assets frozen by a court in the British Virgin Islands. Co-founders Su Zhu and Kyle Davies, along with Davies’ wife, are prohibited from selling or transferring assets worth over $1 billion.
3AC’s Debt to Creditors Amounts to $3.3 Billion
According to Bloomberg, Three Arrows Capital’s liquidators, Teneo, revealed that a court in the British Virgin Islands froze assets worth over $1 billion belonging to Zhu and Davies. The liquidators added that the company owes its creditors an estimated $3.3 billion.
Three Arrows Capital’s Demise and Liquidation
Once one of the largest crypto hedge funds, Three Arrows Capital collapsed in 2022 due to poor investments and the crypto market downturn. The company failed to meet margin calls and defaulted on significant loans, leading to its liquidation.
Zhu and Davies Face Bans and Legal Consequences
Although 3AC operated in Singapore, it filed for bankruptcy in the British Virgin Islands. The Monetary Authority of Singapore (MAS) has banned Davies and Zhu from participating in regulated activities or taking top executive positions at financial firms in Singapore for nine years. Zhu was also arrested and is currently serving a four-month prison sentence for failing to cooperate with the liquidators.
Hot Take: Three Arrows Capital Founders Face Massive Asset Freeze and Legal Troubles
The founders of collapsed hedge fund Three Arrows Capital are now contending with a global freeze on over $1 billion in assets. The court order in the British Virgin Islands has restricted the ability of Su Zhu, Kyle Davies, and Davies’ wife to sell or transfer their frozen assets. With the liquidators claiming that 3AC owes creditors a staggering $3.3 billion, the financial future of the company and its founders remains uncertain. Singaporean authorities have also intervened, banning Zhu and Davies from engaging in regulated activities and imposing legal consequences for non-compliance. The case emphasizes the risks and consequences faced by those in the crypto hedge fund industry.
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