3AC Founders’ Assets Frozen in $1 Billion Legal Battle and Bankruptcy Fallout.

In the unfolding bankruptcy story of Singapore’s Three Arrows Capital (3AC), a court in the British Virgin Islands has frozen over a billion dollars in assets owned by co-founders Su Zhu and Kyle Davies. Bloomberg’s December 21 report notes a freeze preventing Zhu, Davies, and Davies’ wife from selling or moving $1.14 billion assets. Teneo, the firm’s liquidator, estimates that creditors are owed about $3.3 billion following 3AC’s collapse in 2022.

The global freezing order, sought by Teneo, is linked to claims that the founders are responsible for the decline in 3AC’s position, equating to the value specified in the freezing orders. The liquidator disclosed that the 3AC founders also faced a domestic freezing order from the Singapore Court.

Last year, Three Arrows Capital’s co-founders faced turmoil due to an implosion linked to exposure to stablecoin issuer Terra. Formed in 2012, 3AC was once among the world’s largest crypto hedge funds. Financial challenges resulted in Three Arrows Capital’s downfall, failing lender demands, and leading to bankruptcy during the 2022 crypto downturn.

The legal challenges persist for the co-founders, with Su Zhu’s arrest in Singapore in September 2023. He reportedly tried to leave the country after receiving a four-month prison sentence from a local court. Meanwhile, Kyle Davies, facing an imprisonment committal order, remains considerable.

Consequently, the Local central bank has banned Su Zhu and Kyle Davies from Singapore’s regulated activities for nine years. This legal development reflects broader challenges faced by crypto industry figures, as founders of collapsed firms, including Do Kwon and Alex Mashinsky, also confront investigations related to crypto collapses.