Source: Adobe/Christophe Fouquin

A British Virgin Islands court has issued an order freezing approximately $1.14 billion in assets belonging to the co-founders of Three Arrows Capital (3AC).

According to Teneo, the firm’s liquidator, the court order prohibits co-founders Su Zhu and Kyle Davies, as well as Davies’ wife Kelly Chen, from transferring or selling the assets, Bloomberg reported Thursday. 

Teneo estimates that creditors are owed around $3.3 billion.

Three Arrows Capital, formerly one of the largest crypto-native hedge funds, collapsed in 2022 due to a series of poor investments as well as a broader cryptocurrency market downturn.

“The worldwide freezing order has been sought in connection with claims that are being pursued by the liquidators that allege, amongst other things, that the founders should be held responsible for causing 3AC’s position to deteriorate by an amount that is equivalent to the value of the freezing orders sought,” Teneo said.

Previously based in Singapore, Three Arrows Capital filed for bankruptcy in the British Virgin Islands. 

Teneo has accused the founders of failing to cooperate meaningfully in the liquidation process.

Singapore Court Froze 3AC Assets

In addition to the recent court order in the British Virgin Islands, the Singapore Court has previously issued a domestic freezing order.

The developments follow the arrest of Su Zhu in September at Singapore’s Changi Airport as he attempted to leave the country. 

Zhu and Davies were sentenced to four months in prison through a committal order for contempt of court. 

The former Three Arrow executives were issued subpoenas to cooperate with the investigations and activities of Teneo in unraveling issues that led to the implosion of the fund.

Both Zhu and Davies have been banned by Singapore from conducting any regulated activity.

Su Zhu and Kyle Davies were once prominent figures during the bullish phase of the cryptocurrency market. 

However, their reputations and fortunes have suffered as risky practices within the industry were exposed. 

Su Zhu Expected to be Released

As reported, Zhu is set to be released this month based on standard good behavior. The liquidators will continue to pursue all available opportunities to recover creditor assets worth billions in the coming months.

3AC co-founded by Zhu and Kyle Davies imploded in 2022 after leveraged bets went south leading to wider market losses and reduced investor sentiment. 

2022 was a year riddled with several industry collapses putting traders and investors on the edge as the bear market pressed on.

Apart from 3AC, the Terra Network also suffered a similar fate causing billions of losses before the implosion of FTX capped the series of unfortunate events in November. 

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