The cryptocurrency world continues to grapple with the fallout of Three Arrows Capital’s (3AC) collapse in 2022, as a British Virgin Islands court recently froze a staggering $1.14 billion in assets belonging to co-founders Su Zhu and Kyle Davies, along with Davies’ wife Kelly Chen. This dramatic move underscores the ongoing legal battles and efforts to recoup billions lost by creditors.
Court Order Blocks Transfers and Sales:
The freezing order, obtained by the firm’s liquidator Teneo, prevents the co-founders from transferring or selling any assets up to the specified amount. This comes amid accusations from Teneo that Zhu and Davies played a role in “causing 3AC’s position to deteriorate,” contributing to the massive losses incurred by creditors who are estimated to be owed around $3.3 billion.
Singapore Connection and Prior Action:
Adding another layer to this complex saga, Three Arrows Capital, once based in Singapore, previously filed for bankruptcy in the British Virgin Islands. The Singapore Court had already issued a domestic freezing order, and even more interestingly, Su Zhu was arrested in September at Singapore’s Changi Airport while attempting to leave the country. Both Zhu and Davies received four-month prison sentences for contempt of court related to their lack of cooperation with the liquidation process.
Beyond Freezing: Imprisonment, Bans, and Loss of Repute:
The court rulings and freezing orders paint a stark picture of the consequences surrounding 3AC’s implosion. The co-founders, once prominent figures during the crypto market’s bull phase, have seen their reputations and fortunes crumble as a result of risky practices and failed investments. Su Zhu is expected to be released from prison soon, but the legal and financial ramifications of 3AC’s collapse are far from over.
Liquidators Pursue Recovery:
Teneo, as the court-appointed liquidator, remains focused on recouping as much of the creditors’ losses as possible. The upcoming months will likely see continued legal battles and asset recovery efforts. 3AC’s implosion, alongside other major industry crashes like Terra and FTX in 2022, serves as a stark reminder of the risks inherent in cryptocurrency markets and the importance of responsible investment practices.