Court Freezes $1 Billion In Assets Linked To 3AC Founders

Court orders freezing $1 billion in assets of 3AC founders amid bankruptcy and legal proceedings.

What led to Three Arrows Capital's asset freeze?

In a significant legal move, a British Virgin Islands court has imposed a freeze on over $1 billion in assets connected to the co-founders of Three Arrows Capital (3AC), as part of the crypto hedge fund's ongoing bankruptcy proceedings.

Details Of The Court Order And Asset Freeze

The court's decision, announced on Monday, specifically targets 3AC co-founders Su Zhu and Kyle Davies, along with Davies' wife Kelly Chen. They are prohibited from transferring or disposing of assets valued at $1.14 billion. This order is a response to 3AC's bankruptcy filing in July 2022, after the firm was hit hard by the volatile cryptocurrency market. Law firm Latham & Watkins, representing the firm, described the collapse as a consequence of severe market fluctuations. Liquidator Teneo explained that this latest legal action aims to secure 3AC’s assets and facilitate the firm's obligation to its creditors.

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“Problems cannot be solved with the same thinking used to create them.” - Albert Einstein 2022 has been a year in which the crypto community was forced to relearn some old lessons. The linked collapses of multiple platforms has highlighted the compromises the sector has accepted as the price of

Context Of Three Arrows Capital's Collapse

3AC, once a prominent player in the cryptocurrency investment landscape, filed for bankruptcy shortly after a British Virgin Islands court ordered the liquidation of its assets. Teneo was appointed to oversee the insolvency process. The liquidators allege that the founders' actions significantly contributed to the firm's downfall, warranting their responsibility for the company's deteriorated financial position. This legal strategy seeks to hold them accountable for losses equivalent to the value of the frozen assets.

Apart from the British Virgin Islands court action, Singapore's central bank also intervened, banning Zhu and Davies from conducting various market activities for nine years. Zhu's subsequent arrest in Singapore added to the founders' legal troubles. Teneo emphasized that the freezing order is crucial to prevent any actions by Zhu, Davies, and Chen that could hinder the enforcement of the liquidators' rights. Moreover, a Singapore court echoed this stance with a similar freezing order. The strong legal measures indicate a concerted effort to manage the fallout of 3AC’s bankruptcy and ensure compliance with the liquidation process. At the time of reporting, the 3AC founders and Chen were not available for comment.

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