Court Freezes $1 Billion in Assets Owned by 3AC Founders
A court in the British Virgin Islands has issued an order to freeze assets totaling approximately $1 billion, owned by the founders of cryptocurrency hedge fund Three Arrows Capital (3AC). The fund’s liquidator Teneo has confirmed this development with Bloomberg.
Restraining Order on 3AC Founders
The court has issued an order restraining co-founders Su Zhu and Kyle Davies, along with Davies’ wife Kelly Chen, from transferring or selling assets valued at up to $1.14 billion, as stated in an email from liquidator Teneo. The liquidator estimates that creditors are owed approximately $3.3 billion.
Reasons Behind Freezing Order
The freezing order is connected to claims made by the liquidators, alleging that the founders are responsible for causing 3AC’s position to deteriorate by an amount equivalent to the value of the freezing orders sought.
Singapore Court’s Domestic Freezing Order
Teneo also revealed that a domestic freezing order was issued by the Singapore Court. This comes after Su Zhu’s arrest in September at Singapore’s Changi Airport and a subsequent ban on him and Kyle Davies from engaging in any regulated activity within Singapore.
The Downfall of Three Arrows Capital
In 2022, Three Arrows Capital faced a downfall due to a series of unsuccessful investments and the broader cryptocurrency market downturn. The hedge fund sought bankruptcy proceedings in the British Virgin Islands, where Teneo was appointed as the liquidator. Non-cooperation allegations have been raised against Su Zhu and Kyle Davies.
Hot Take: Three Arrows Capital Faces Asset Freeze Amidst Allegations
The founders of cryptocurrency hedge fund Three Arrows Capital are facing a significant setback as a court in the British Virgin Islands has frozen their assets worth around $1 billion. The freezing order comes amidst allegations that the founders caused the fund’s position to deteriorate. This development follows a domestic freezing order issued by the Singapore Court and the arrest of one of the founders. Three Arrows Capital’s downfall highlights the challenges faced by cryptocurrency hedge funds and serves as a cautionary tale for investors in the volatile crypto market.
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