British Virgin Islands court freezes over $1b in 3AC assets
Assets worth about $1 billion belonging to the cryptocurrency hedge fund Three Arrows Capital (3AC) founders were frozen by a British Virgin Islands court.
A British Virgin Islands court has frozen about $1 billion in assets owned by the founders of the cryptocurrency hedge fund Three Arrows Capital (3AC), as stated by the firm’s liquidator.
The court’s order restricts co-founders Su Zhu and Kyle Davies, and Davies’ wife Kelly Chen, from moving or selling assets valued up to $1.14 billion, with creditors estimated to be owed around $3.3 billion. 3AC, previously one of the biggest crypto-native hedge funds, collapsed in 2022 following a series of unsuccessful investments.
“The worldwide freezing order has been sought in connection with claims that are being pursued by the liquidators that allege, among other things, that the founders should be held responsible for causing 3AC’s position to deteriorate by an amount that is equivalent to the value of the freezing orders sought.”
Teneo representatives
Zhu and Davis are accused of forcing 3AC to take on significant leverage between May and June 2022 after the hedge fund suffered heavy losses on ill-fated Luna tokens and other investments.
The firm was already insolvent, the liquidators say, and they are now suing Zhu and Davis in a British Virgin Islands court to recover those losses from the firm’s creditors.
Previously, Teneo, designated as the liquidator by a British Virgin Islands court, has charged the founders with a lack of meaningful cooperation.
In early 2023, the 3AC founders announced plans to raise $25 million to launch a new cryptocurrency exchange.
In September, Zhu was arrested while trying to leave Singapore and sentenced to four months in jail. In December, he faced his first court questioning in Singapore court regarding the firm’s collapse.
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