Wednesday, July 13, an emergency motion in bankruptcy court froze the assets of a major crypto hedge fund. Now, the founders are nowhere to be found.
Mark Glenn, Federal Judge of the Southern District of New York, passed a motion that froze the remaining assets of Three Arrows Capital. Reportedly, the crypto hedge fund managed $10 billion in assets during its decade of operation.
However, the firm, also known as 3AC, has had a swift decline since they were ordered to liquidate by a court in the British Virgin Islands. After the court ordered the crypto hedge fund to release their assets, they filed for bankruptcy.
Shortly after, co-founders Zhu Su and Kyle Davies disappeared from the public eye.
Beyond the court’s decision to freeze the crypto hedge fund’s assets
Nevertheless, the bankruptcy court hearing did more than freeze their assets. It gave advisory firm, Teneo, the power to subpoena those who have done business with 3AC.
As a result, the courts hope they can prevent Zhu and Davies siphoning money from the fund whilst on the run.
“A key part of this motion is to put the world on notice that it is the liquidators that are controlling the debtor’s assets at this stage.”— Adam Goldberg, Teneo Attorney / Cointelegraph
Despite a life on the lam, 3AC’S Zhu Su felt the need to respond to the crypto hedge fund’s court decision on Twitter.
They may be in hiding, but they aren’t silent
Three Arrows Capital has global ties from the U.S. to Singapore, which made it easier for its co-founders to disappear. Creditors looking for Su and Davies even reported their Singapore office as vacant, “save for a few inactive computer screens.”
Tuesday, Su took to Twitter to defend himself and Kyle Davies after a month-long hiatus from the platform. He claims they have been doing all they can to cooperate with creditors.
However, he feels investigators are “baiting” them to incriminate themselves.
Finally, there may be traction on this crypto hedge fund having to pay back their debts, but their days in court are far from over.
Blockchain investing specialists agree that reclaiming the full sum could be a matter of multiple years.
As of now, at least the process is underway.