Court freezes $1,14 billion in assets of 3AC fund founders

What’s new? The court in the British Virgin Islands has frozen the assets of the co-founders of the bankrupt cryptocurrency hedge fund Three Arrows Capital (3AC), as announced by its liquidators from the firm Teneo. According to the ruling, Su Zhu and Kyle Davies, as well as Davies’ wife Kelly Chen, are prohibited from transferring or selling assets in their possession, valued at an estimated $1,14 billion. Teneo said it owes about $3,3 billion to 3AC’s creditors.

Bloomberg’s material

What else is known? Previously, representatives of Teneo repeatedly stated about the refusal of Zhu and Davies to cooperate on liquidation issues. In September, in connection with this circumstance, Zhu was arrested by the authorities of Singapore while trying to leave the country and received a 4-month prison term, but in December was released for good behavior. Both founders of 3AC were banned by the local regulator from holding senior positions in financial organizations for nine years.

The fund operated out of Singapore, but filed for bankruptcy in the British Virgin Islands court, having previously handed over management to an offshore company. The liquidation order was issued at the end of June last year.

The founders of 3AC themselves cited a general market downturn as the cause of the collapse. It was caused by the Terra blockchain team’s attempt to restore the value of its native coins by selling off bitcoins from reserves, which caused lenders to demand repayment of loans en masse. 3AC’s creditors also include now-bankrupt crypto broker Voyager Digital and lending platform Celsius.

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Despite 3AC’s bankruptcy, Zhu and Davies later raised at least $25 million to launch the OPNX debt token exchange in early April of this year. However, as early as May, the exchange received a fine from the Dubai regulator, which later threatened enforcement action if the fine was not settled.

In late November, 3AC reached an agreement with bankrupt broker Genesis as part of the Digital Currency Group (DCG) conglomerate: the broker will pay the fund $33 million instead of the original amount of claims of $1 billion.