The Escalating Crisis of 3AC
The bankruptcy saga of Singapore-based cryptocurrency hedge fund Three Arrows Capital (3AC) continues to unfold, with a court freezing more than a billion dollars of the founders’ assets.
Global Freeze on Founders’ Assets
A court in the British Virgin Islands has banned 3AC co-founders Su Zhu and Kyle Davies from transferring or selling assets worth up to $1.14 billion, according to the firm’s liquidator Teneo, Bloomberg reported on Dec. 21. This move is seen as a significant escalation in the legal battles facing the founders.
Impact Beyond the Founders
The restriction has reportedly also impacted assets owned by Davies’ wife Kelly Chen. Teneo said it estimated that 3AC creditors are owed roughly $3.3 billion in the aftermath of the hedge fund’s collapse in 2022.
Legal Allegations and Actions
According to Teneo, the worldwide freezing order was sought in conjunction with its allegations that the founders should be held liable for causing “3AC’s position to deteriorate by an amount that is equivalent to the value of the freezing orders sought.” The liquidator also noted that 3AC founders are subject to a domestic freezing order from the Singapore Court.
The Downfall of a Crypto Giant
Founded in 2012, 3AC was one of the largest crypto hedge funds in the world before the firm failed to meet margin calls from its lenders and filed for bankruptcy during the 2022 crypto bear market.
Arrests and Bans
Zhu was arrested in Singapore in September 2023 when he reportedly attempted to flee the country after a local court sentenced him to four months of imprisonment. Davies, who also received an imprisonment committal order, reportedly remains at large. Both Zhu and Davies were also banned from regulated activities in Singapore for nine years by the local central bank.
