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3AC founders Su Zhu, Kyle Davies: Three Arrows Capital liquidator seeks subpoena for missing founders

By Raphael Sanis

Edited by Charlie Mellor

11:19, 19 October 2022

A courtroom gavel lies next to the word ‘subpoena’
Teneo has asked to subpoena both founders of Three Arrows Capital to court – Photo: Shutterstock

Teneo, the liquidator for Three Arrows Capital (3AC), has asked a US court to grant it permission to subpoena the crypto hedge fund’s founders Su Zhu and Kyle Davies.

According to Teneo, the founders have not fully cooperated with the liquidation process and normal contact methods have failed.

The liquidator asked the court to subpoena Zhu and Davies through “alternative methods”, by sending requests to their Twitter accounts and email addresses, according to a Bloomberg report.

While the hedge fund operated in Singapore before it filed for bankruptcy, the location of the two founders is unknown.

Fund brought down by bear market

Once one of the crypto industry’s largest hedge funds, 3AC it saw its downfall this year with the onset of the crypto bear market, which was driven by the terra (LUNA) crash in May. Since then, Terraform Labs has launched a new LUNA crypto.



381.90 Price
+0.840% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.50


0.58 Price
-9.470% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168


3,407.71 Price
-0.500% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00


63,634.40 Price
-1.530% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

Unable to pay off debt to protocols including Voyager (VGX) and Celsius Network (CEL), 3AC filed for Chapter 15 bankruptcy on 1 July.

Two US agencies now investigating 3AC

Both the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission are now investigating 3AC. The commissions are looking at whether the hedge fund misled investors about its balance sheet and failed to register with the required agencies.  

Meanwhile, the founders are keeping a low profile. The last time Zhu tweeted was on 12 July after he blamed the liquidator for “baiting”, instead of acting in good faith. Davies has similarly been unactive on Twitter with his last original tweet dating back to June.

Bloomberg reported that liquidators had now gained control of tens of millions of dollars from 3AC.  This follows the news that 3AC’s most expensive non-fungible tokens (NFTs) were being liquidated by Teneo.

According to blockchain analytics platform Nansen, the portfolio of more than 300 NFTs has an estimated value of 625 ETH – a little over $81,000 as of earlier on 19 October. But this is far from the billions of dollars owed in debt to Voyager, Celsius and other creditors.

Markets in this article

LUNA2.0 to USD
0.4391 USD
-0.0183 -4.120%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

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