FinTelegram reported that a British Virgin Islands court ordered the liquidation of the crypto hedge fund Three Arrows Capital Ltd (3AC) earlier this week. The fund, founded by former Credit Suisse traders Zhu Su and Kyle Davies, managed an estimated $10 billion of assets as recently as March, according to blockchain analytics firm Nansen. While Bloomberg reported that 3AC filed for Chapter 15 bankruptcy to protect its U.S. assets, rumors suggest that liquidators are going for the Singapore assets of 3AC and its founder.
The law firm Latham & Watkins represents Three Arrows in the U.S. bankruptcy. The case is Three Arrows Capital Ltd and Russell Crumpler, 22-10920, U.S. Bankruptcy Court for the Southern District of New York (Manhattan). The court papers show that 3AC is aiming for an ancillary Chapter 15 proceeding so liquidators and creditors cannot seize the firm’s U.S. assets.
The 3AC insolvency has forced significant industry players to restructure operations and limit customer withdrawals amid a massive crypto selloff that caught plenty of mega-firms off guard. While Chapter 15 bankruptcy will allow the 3AC to protect its stateside assets while the liquidation is carried out in the British Virgin Islands following a court order this week after 3AC defaulted on a $660 million loan to Voyager Digital. Following the ostensible BVI liquidation notice, the Monetary Authority of Singapore (MAS) published a press release that says 3AC misled regulators.
The headquarters of 3AC is based in Singapore, where Zhu Su and his wife purchased a $35 million property in Singapore late last year and are now selling it in the crypto winter environment. Rumors are that 3AC liquidators are trying to seize the Singapore assets of 3AC and Zhu Su.
