Three Arrows Capital: $1 Billion Frozen Assets.

Three Arrows Capital: Frozen Assets

The Court of the British Virgin Islands has frozen up to $1.1 billion in assets belonging to Su Zhu and Kyle Davies, the founders of the defunct cryptocurrency fund Three Arrows Capital, or 3AC, as well as to Davies’ wife. The company’s liquidator, Teneo, stated today in a note shared with The Block that the British Virgin Islands court issued the order on December 18 to prevent the two founders and Davies’ wife, Kelly Chen, from disposing of their assets worldwide.

According to Teneo, the global freezing order was requested in relation to claims that the liquidators are pursuing, which allege, among other things, that the founders should be held responsible for the deterioration of 3AC‘s financial position for an amount equivalent to the value of the freezing orders requested. Teneo also highlighted that a court in Singapore granted a freezing order on Wednesday.

The order from the British Virgin Islands court comes after Su Zhu was arrested at Changi Airport in Singapore in September while trying to leave the country. Last week, Zhu was questioned by a Singapore court in response to the 3AC liquidator, Teneo, which is trying to recover $3.5 billion for the company’s creditors.

Following the arrest, the Court of the British Virgin Islands issued a freezing order on assets worth $1.1 billion belonging to Su Zhu, Davies, and Davies’ wife, Kelly Chen. This order was issued to prevent the founders from disposing of their assets worldwide.

The Liquidators’ Claims

According to the company’s liquidator, Teneo, the global freezing order was requested following claims advanced by the liquidators that the founders of Three Arrows Capital, also known as 3AC, should be held responsible for the deterioration of the company’s financial position. These claims state that the amount of deterioration is equivalent to the value of the freezing orders requested.

Teneo also highlighted that a Singapore court has granted a “domestic” freezing order, demonstrating that legal actions against the founders of 3AC are taking place in multiple jurisdictions.

The Financial Situation of Three Arrows Capital

Three Arrows Capital, abbreviated as 3AC, was forced to file for bankruptcy in July 2022 following the collapse of the Terra Luna ecosystem. This event shook the cryptocurrency markets and had a significant impact on the fund’s activities. According to documents filed at the time of bankruptcy, Three Arrows Capital, or 3AC, owes creditors at least $3.5 billion.

That’s why the company’s financial situation subsequently led to legal actions by the liquidators to recover funds for the creditors. The asset freezing order issued by the Court of the British Virgin Islands is part of these legal actions and aims to prevent the founders of 3AC from disposing of their assets.

Conclusions

The asset freezing order issued by the Court of the British Virgin Islands against the founders of Three Arrows Capital, also known as 3AC, and the wife of one of the founders indicates the serious financial difficulties faced by the company. This order is part of a broader context of legal actions undertaken by the liquidators to recover funds for the creditors.

The financial situation of Three Arrows Capital, or 3AC, was strongly influenced by the collapse of the Terra Luna ecosystem and the resulting instability in the cryptocurrency markets. The company filed for bankruptcy in July 2022 and, according to documents filed, owes creditors at least $3.5 billion.

The arrest of Su Zhu and the asset freezing order issued by the Court of the British Virgin Islands further highlight the challenges that Three Arrows Capital, also known as 3AC, is facing in its current financial situation. It will be interesting to follow the development of legal actions undertaken by the liquidators and their impact on creditors and the company’s founders.