3AC founders Su Zhu, Kyle Davies: Three Arrows Capital liquidator seeks subpoena for missing founders
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.
LUNA2 to USD
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.
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