3AC Founders' Assets Frozen

The tale of Singapore-based cryptocurrency hedge fund Three Arrows Capital (3AC) takes a new turn.

A court in the British Virgin Islands has now imposed a freeze on assets amounting to over a billion dollars owned by co-founders Su Zhu and Kyle Davies.

On 21 December, the British Virgin Islands court has prohibited Zhu and Davies from transferring or selling assets valued up to $1.14 billion, as revealed by the firm's liquidator Teneo.

This legal restriction has extended its reach to assets held by Davies' wife, Kelly Chen.

Teneo estimates that creditors of 3AC are owed approximately $3.3 billion following the hedge fund's collapse in 2022.

Allegations by Teneo

Teneo's allegations prompt a worldwide freezing order, asserting that the founders should be held accountable.

Teneo said in a statement:

"The worldwide freezing order has been sought in connection with claims that are being pursued by the liquidators that allege, amongst other things, that the Founders should be held responsible for causing 3AC’s position to deteriorate by an amount that is equivalent to the value of the freezing orders sought,"

Additionally, Teneo notes that the 3AC founders are under a domestic freezing order from the Singapore Court.

3AC's Background

Established in 2012, 3AC once stood as one of the world's largest crypto hedge funds.

However, the firm faced adversity during the 2022 crypto bear market, failing to meet margin calls from lenders and subsequently filing for bankruptcy.

The aftermath saw Su Zhu arrested in Singapore in September 2023 while attempting to flee the country after a local court sentenced him to four months of imprisonment.

Meanwhile, Kyle Davies, who received a committal order for imprisonment, is reportedly still at large.

Adding to their woes, both Zhu and Davies find themselves banned from engaging in regulated activities in Singapore for a duration of nine years, as dictated by the local central bank.