Crypto Firm Three Arrows Capital Founder Worries About Jail Time

Paigambar Mohan Raj
Source: The Daily Encrypt

Three Arrows Capital (3AC), the crypto hedge fund company, was one of many that were at the center of the 2022 market crash. The firm was ordered to be liquidated by a British Virgin Islands court. The courts appointed advisory firm Teneo, to liquidate the company’s assets.

Nonetheless, there have been some confrontations between the court-appointed liquidators and the founders of 3AC. Co-founder, Su Zhu has submitted an affidavit in Bangkok accusing the liquidators of misleading the High Court of Singapore. According to the liquidators, founders Zhu and Kyle Davies, have not cooperated with the liquidation process.

The liquidators said in court that the founders of the crypto firm only disclosed a small portion of the assets of the fund in a selective manner. However, Zhu’s affidavit asserts that the liquidators did not give the Singapore court a complete or accurate account of what happened.

What did Zhu say about his crypto firm in the affidavit?

Zhu introduced himself as the director of TACPL, or Three Arrows Capital Pte Ltd. Zhu claims that this organization was licensed in Singapore until July 31, 2021, and that it first registered as a fund manager there around the month of August 2013. Three Arrows Fund Ltd. (TAFL), a feeder fund domiciled in the British Virgin Islands, and Three Arrows Fund LP (TAFLP), a feeder fund registered in the state of Delaware, US, were also mentioned by Zhu. These organizations contributed to a master fund known as “the Company” in the affidavit.

The affidavit states that as of September 1, 2021, the TACPL business, which was formerly registered in Singapore, ceased to be the investment manager for the master and feeder funds. A fourth business entered its place, named ThreeAC Ltd, a British Virgin Islands-based company that has served as the fund’s investment manager “since in or around August 2021.”

The affidavit stated that TACPL is concerned about the possibly severe repercussions that could result from the Liquidators’ use of their broad powers. This could potentially include jail time for the founders, officers, and representatives.

The 2022 crash was one of the most historic to ever take place. The fall of the Terra network brought in a chain reaction that saw led to many crypto firms going underwater. Other firms that found themselves in a hole are Voyager Digital, Celsius Network, and Babel Finance.