The ongoing bankruptcy saga of Three Arrows Capital (3AC), a cryptocurrency hedge fund based in Singapore, has taken a new turn, with a court imposing a freeze on the founder’s assets exceeding $1 billion.
According to a report by Bloomberg on December 21, a court in the British Virgin Islands has ordered a freeze on the transfer or sale of assets valued up to $1.14 billion belonging to 3AC co-founders Su Zhu and Kyle Davies. Teneo, the company's liquidator, disclosed this information. The freezing order also extends to assets held by Davis' spouse, Kelly Chen. Teneo stated that the creditors of 3AC are estimated to be owed around $3.3 billion following the hedge fund’s collapse in 2022. Additionally, Teneo accused the founders of causing the decline in 3AC's financial standing equivalent to the value specified in the freezing order, as it pursued a global freezing order. The liquidators highlighted that the 3AC founders faced a local court’s domestic freezing order in Singapore.
Established in 2012, 3AC previously stood as one of the largest cryptocurrency hedge funds globally. However, it encountered financial distress during the cryptocurrency bear market in 2022, failing to meet the margin calls of its lenders, ultimately leading to its bankruptcy filing. In a subsequent development, Su Zhu faced arrest in Singapore in September 2023, and reports surfaced that he attempted to escape the country after receiving a four-month jail sentence from a local court. Similarly, Davis received a jail order but is reportedly evading arrest.
Further compounding their legal woes, both Chu and Davis have been banned by Singapore’s central bank from participating in regulated activities for a duration of nine years. These actions by the local court and financial regulatory authorities underscore the seriousness of the alleged mismanagement and financial misconduct associated with the 3AC collapse.
