A massive asset freeze targets the founders of Three Arrows Capital and a family member in a bid to recoup funds for creditors.
In a dramatic turn of events, Su Zhu and Kyle Davies, the beleaguered co-founders of the defunct crypto hedge fund Three Arrows Capital (3AC), along with Davies' wife, Kelly Chen, have been hit with a worldwide freezing order. A British Virgin Islands court has mandated that the trio is prohibited from handling, transferring, or disposing of their assets up to a staggering $1.14 billion. This decision is a pivotal move in the ongoing saga of 3AC's collapse and the subsequent scramble to secure assets and satisfy creditors' claims.
The liquidation firm Teneo, acting on behalf of 3AC, has spearheaded this legal effort as part of its broader strategy to maximize returns for the hedge fund's creditors, who are currently staring down losses exceeding $3 billion. This latest court action, which also saw the Singaporean authorities stepping in with a similar order, is aimed squarely at preventing any further dissipation of assets that could hinder the liquidators' ability to enforce eventual claims.
Three Arrows Capital's downfall was precipitated by tumultuous market conditions and the collapse of the Terra ecosystem in May 2022, leading the fund to file for bankruptcy shortly after. The fallout has been severe, with Zhu facing arrest in Singapore for non-cooperation during the initial stages of the liquidation process.
"The order is specifically designed to prevent the founders and Ms. Kelly Chen from disposing of or otherwise dealing with assets in any way that might frustrate eventual enforcement by the liquidators,” Teneo emphasized in its statement. This move reflects the heightened urgency and aggressive stance being taken to unravel the complex web of 3AC's financial dealings and to hold the founders accountable for their role in the hedge fund's demise.
As Teneo continues to navigate this complex liquidation, the asset freeze marks a significant moment in their quest to unravel the financial chaos left in the wake of 3AC's implosion. The founders and Chen have not yet responded to these developments, leaving the industry and observers to watch closely as this high-stakes financial drama continues to unfold.