Cryptocurrency News

Founders Of 3AC Go Missing As Investors Try To Recoup Funds

Court documents were filed recently in New York, which discloses that the founders of crypto hedge fund Three Arrows Capital that filed for liquidation recently are on the run from their creditors.

Founders go missing

According to the lawyers who represent creditors of the doomed crypto hedge fund, they do not know the physical whereabouts of Kyle Davies and Zhu Su, who had launched the company back in 2012. This came to light ahead of a hearing scheduled for Tuesday at 9 a.m. ET for discussing the next steps to be taken in the liquidation process.

The documents had been filed on Friday in the evening and they further alleged that 3AC’s founders had not begun cooperating meaningfully in the liquidation process. Lawyers also requested on Monday that the identity of the creditors remain anonymous and not be disclosed.

3AC’s bankruptcy

Back in March, Three Arrows Capital had been one of the biggest crypto hedge funds in the market, as it was managing funds of about $10 billion. However, the company ended up filing for Chapter 15 bankruptcy on July 1st in the Southern District of New York in order to seek protection from creditors in the United States.

This occurred after the crypto market plunged and the implosion of the TerraUSD (UST) stablecoin and its sister token LUNA, which wiped out 3AC’s assets. Before the company filed for bankruptcy, a court in the British Virgin Islands had ordered it to liquidate for paying back its debts.

The crypto hedge fund has now entered bankruptcy court and lenders want to recover their money. Teneo, the global advisory firm, was retained to assist in the liquidation process, which means starting with figuring out what assets are left.

Friday’s court filing

Davies and Zhu, the co-founders of 3AC, formerly traded for Credit Suisse. The court filing on Friday revealed that last week, the two former traders had participated in a Zoom call for discussing the steps to preserve assets. But, neither of them had spoken during the call or turned on their video. The council carried out the dialogue and said that they were going to cooperate.

The filing said that representatives had asked for access to 3AC’s offices immediately, along with information pertaining to their digital wallets and bank accounts. However, they had not been granted. When the liquidators had arrived at the Singapore offices of the fund back in June for a meeting with the founders, they had found them to be empty with just a few inactive computer screens.

According to the filing, the doors had been locked, but unopened mail piled up that was pushed under the door. People in surrounding offices disclosed that people had last been seen in the crypto hedge fund’s offices in early June. Meanwhile, creditors are trying to assess what assets the hedge funds have.

Russell Crumpler from Teneo, who was hired to assist in the liquidation process, asserted that the assets of 3AC could disappear if they are not immediately discovered.

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