3 Arrows Capital Co-Founders are Missing amidst Bankruptcy filing

Namrata Shukla
Three Arrows' Co-founders missing?
Source:Crypto Times

Cryptocurrency firms have been chasing regulation clarity for their business and digital assets for a while now. Over the past year, multiple lawsuits have been filed between the regulatory authorities and crypto businesses, one of which was served to Three Arrows Capital. The over-leveraged hedge fund is now subjected to a liquidation order in the British Virgin Islands; however, the whereabouts of its co-founders are currently unknown.

According to a bankruptcy filing made to the United States Bankruptcy Court in the Southern District of New York, co-founders Su Zhu and Kyle Davies cannot be placed. It noted,

“The Foreign representatives understand and believe that while the Debtor has had certain operations in Singapore, Mr. Davies and Mr. Zhu’s current location remains unknown. They are rumored to have left Singapore.”

As per the document, the lawyers acting on behalf of the creditors of Three Arrows Capital claimed that the founders “have not begun the cooperate with the [proceeding] in any meaningful manner.” Although the co-founders were initially a part of the briefs on Zoom call, their audio and video were turned off and never responded directly to any questions posted, with only the legal team answering.

Meanwhile, the lawyers also mentioned in the court documents that Three Arrows’ Singapore office had been abandoned. Tensions are mounting that assets belonging to the lending company, mainly in crypto, cash, and NFTs, could be transferred. Recently, the NFT belonging to Three Arrows’ NFT fund, Starry Night, was moved to a new wallet without specific reasons.

Moreover, Su Zhu was rumored to sell his $35 million Singapore mansion, with proceeds being sent to a bank in Dubai. This added to the concerns of the creditors seeking to freeze Three Arrows’ assets after the founders listed out the fund’s assets.

“On June 27, 2022, the Debtor commenced a liquidation proceeding before the BVI Court, and that court has appointed the Foreign Representatives as joint liquidators of the Debtor. By filing the Petition to commence this chapter 15 case (the “Chapter15 Case”), the Foreign Representatives seek to stay active efforts by individual creditors to seize assets and to preserve the status quo, and afford the Foreign Representatives an opportunity to stabilize the Debtor’s estate, preserve the Debtor’s assets, and conduct a complete investigation of the Debtor, claims against its estate, and its assets, including causes of action.2.”

The bankruptcy filing highlighted that the hedge fund had over $3 billion of assets under management as of April 2022.