Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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Three Arrows Capital Liquidators Can’t Seem To Find the Founders?
Where in the world are Su Zhu and Kyle Davies? The founders of the cryptocurrency hedge fund Three Arrows Capital (3AC) are nowhere to be found, according to officials charged with liquidating the bankrupt company (via Reuters).
According to a court document filed Friday, Zhu and Davies’ whereabouts are currently unknown, and its liquidators say they have not received “any meaningful cooperation” from the two. On Tuesday, a judge granted 3AC’s liquidators full control of 3AC’s assets, preventing them from transferring any money out of their accounts.
See: Three Arrows Capital crypto hedge fund files for bankruptcy
The Singapore-based 3AC filed for Chapter 15 bankruptcy earlier this month, a move designed to protect foreign companies’ assets from creditors in the US. News of the bankruptcy filing surfaced after 3AC defaulted on a $670 million loan provided by crypto broker Voyager Digital, which has since filed for bankruptcy as well. 3AC also reportedly failed to repay $270 million to crypto exchange Blockchain.com. A British Virgin Islands court tasked business management company Teneo with overseeing 3AC’s liquidation.
Russell Crumpler and Christopher Farmer, two senior directors at Teneo, claim they have been unable to get in touch with Zhu and Davies. In the court filing, Crumpler and Farmer allege they joined a Zoom call with “persons identifying themselves as ‘Su Zhu’ and ‘Kyle,’” but “their video was turned off and they were on mute at all times with neither of them speaking despite questions being posed to them directly.”
See: Federal Reserve: Crypto and DeFi Insights from Recent Turbulence Through a Financial Stability Lens
During the Zoom call, the two founders communicated through representatives from the Singapore-based legal agency, Advocatus and Solitaire. Farmer alleges that he even tried locating Zhu and Davies at the 3AC headquarters in Singapore — only to find a locked door and a pile of unopened mail. The filing notes Zhu may be trying to sell his $35 million mansion in Singapore, citing various rumors.
Crumpler and Farmer claim there’s an “imminent risk” that the duo could attempt to transfer the company’s remaining funds elsewhere. “Here, that risk is heightened because a substantial portion of the Debtor’s assets are comprised of cash and digital assets, such as cryptocurrencies and non-fungible tokens, that are readily transferrable,” the filing reads.
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