• A British Virgin Islands court freezes assets worth around $1 billion belonging to 3AC co-founders.

  • The court order prevents co-founders Su Zhu, Kyle Davies, and Davies’s wife from transferring or selling the assets. 

  • A Singapore court issued a domestic freeze order against the co-founders as the liquidator tried to recover assets.

A British Virgin Islands court has frozen around $1 billion in assets owned by the founders of cryptocurrency hedge fund Three Arrows Capital, Bloomberg reported, citing statements from the firm’s liquidator, Teneo. 

Indeed, the court order froze assets worth up to $1.14 billion owned by Co-Founders Su Zhu and Kyle Davies. By extension, the order also restricts Davies’ wife, Kelly Chen, from transferring or selling any of the assets. 

The British Virgin Islands court order follows a domestic freezing order issued by a Singapore court, Teneo said. Last week, Zhu made his first appearance in a Singapore court as liquidators sought information to retrieve assets. 

During the hearing, Zhu was questioned on the whereabouts of assets and details on how the crypto hedge fund failed. The liquidator estimates that creditors are owed around $3.3 billion. 

In a statement, Teneo remarked: 

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 was appointed by a British Virgin Islands court as liquidator after 3AC filed for bankruptcy in the country. However, the liquidator has previously accused the founders of failing to “cooperate meaningfully.”

The 3AC co-founders’ woe started last year following an implosion caused by exposure to stablecoin issuer Terra. The firm, once the largest crypto-native hedge fund, collapsed and has since led to several allegations against the founders.

The firm’s collapse, alongside several other bankruptcies, precipitated the crypto winter, which wiped trillions off the market. Founders, like Do Kwon and Alex Mashinsky, are also facing investigations for their respective roles in the spat of crypto collapses. 

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