The dramatic saga of three arrows

The bankruptcy saga surrounding cryptocurrency hedge fund Three Arrows Capital continues. A court froze more than $1 billion in assets from the founders – one of whom previously worked for Credit Suisse.

High dreams and hard landings: For a long time, Singapore-based Three Arrows Capital (3AC) was one of the largest cryptocurrency hedge funds in the world. But the company fell from the top to the bottom in 2022.

The rapid decline during the cryptocurrency crisis led to billion-dollar bankruptcies. That’s from previous traders Chu Su And Kyle Davies The company, which was founded at the kitchen table in 2012, was unable to meet lenders’ margin requirements and was forced to file for bankruptcy.

Huge mountain of debt

Davis started working as a derivatives trader at Credit Suisse (CS) in Tokyo in 2009 after graduating from Columbia University. Zhou was a trader at Deutsche Bank

According to insolvency administrator Teneo, a court in the British Virgin Islands has barred the founders from transferring or selling assets worth up to $1.14 billion, Bloomberg reported. (Paid article). Teneo estimates that 3AC’s creditors will be owed about $3.3 billion after the hedge fund collapses in 2022.

Behind bars – on the run

“The global freezing order has been sought in relation to the claims of the insolvency administrators who claim, among other things, that the founders should be held liable for the fact that the 3AC position has deteriorated by an amount consistent with the value of the freezing orders,” Tinio said.

In the past, the Insolvency Administrator has accused the 3AC founders, among other things, of not cooperating sufficiently.

Zhu was arrested in Singapore in September 2023 while trying to flee the country after a local court sentenced him to four months in prison. Davis, who has an arrest warrant issued for him, reportedly remains at large.