The bankruptcy ordeal of Singapore-based cryptocurrency hedge fund, Three Arrows Capital (3AC), is intensifying as a court in the British Virgin Islands has imposed a freeze on more than a billion dollars’ worth of assets belonging to its co-founders, Su Zhu and Kyle Davies.
Bloomberg reported on December 21 that the court has prohibited Zhu and Davies from transferring or selling assets valued at up to $1.14 billion.
This restriction has also affected assets owned by Davies’ wife, Kelly Chen. According to the liquidator of 3AC, Teneo, the hedge fund’s creditors are owed an estimated $3.3 billion following its collapse in 2022.
Teneo has sought a worldwide freezing order, alleging that the founders should be held accountable for causing “3AC’s position to deteriorate by an amount equivalent to the value of the freezing orders sought.”
Additionally, the liquidator noted that the 3AC founders are subject to a domestic freezing order from the Singapore Court. Teneo has not responded to Cointelegraph’s request for comment at this time.
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Founded in 2012, 3AC was once among the largest cryptocurrency hedge funds globally.
However, it faced financial difficulties during the 2022 crypto bear market when it failed to meet margin calls from its lenders, ultimately leading to its bankruptcy.
In September 2023, Su Zhu was arrested in Singapore as he reportedly attempted to flee the country after a local court sentenced him to four months of imprisonment.
Meanwhile, Kyle Davies, who also received an imprisonment committal order, is reportedly still at large.
Furthermore, both Zhu and Davies have been banned from engaging in regulated activities in Singapore for a duration of nine years by the local central bank.
The ongoing legal proceedings and asset freezes underscore the significant challenges faced by prominent cryptocurrency firms as they navigate the volatile crypto market and regulatory environments.
The cryptocurrency community will undoubtedly continue to monitor this case closely as it unfolds.
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