Three Arrows Capital Liquidators Demand $1.3B from Bankrupt Fund’s Founders in Legal Battle

Vignesh Karunanidhi
Three Arrows Capital Liquidators Demand $1.3B from Bankrupt Fund's Founders in Legal Battle
Source: La Tarde

Three Arrows Capital has attracted significant attention in the past year due to the challenges faced by Terra and the troubled struggles of the Celsius Network. Throughout 2022, several crypto firms, including Celsius Network, Voyager, and Three Arrows Capital (3AC), have encountered difficulties and subsequently filed for bankruptcy as they grapple with maintaining stability in the crypto lending sector.

According to the latest updates, liquidators of Three Arrows Capital are seeking the recovery of $1.3 billion from the co-founders. Additionally, the founders of Three Arrows face accusations of accumulating substantial debts in the months leading to the firm’s collapse.

Source: Bitcoinist

Three Arrows Capital liquidators discussed the allegations with creditors

According to the details of a Bloomberg report, the liquidators reportedly discussed the allegations with the creditors of the now-bankrupt firm at a meeting on Tuesday. The liquidators have accused Zhu and Davies of taking significant leverage after the crash of Terra in May 2022. The liquidators are trying to recover the lost funds in a British Virgin Islands court.

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Multiple factors contributed to the collapse of Three Arrows Capital (3AC). These include the downturn of the Terra ecosystem, the general decline in cryptocurrency values, and 3AC’s own high-risk trading tactics. One factor was 3AC’s exposure to TerraUSD (UST), a stablecoin that experienced a loss in its value in May 2022.