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Monday, March 27, 2023

US Bankruptcy Judge Freezes Crypto Hedge Fund Three Arrows Capital’s Assets

US Bankruptcy Judge Freezes Crypto Hedge Fund Three Arrows Capital’s Assets – According to CNBC, which monitored the hearing, Judge Martin Glenn of the Southern District of New York’s bankruptcy court allowed an emergency move to freeze the remaining assets of the insolvent cryptocurrency hedge fund Three Arrows Capital (3AC) on Tuesday.

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Only the designated bankruptcy liquidators are permitted to “transfer, encumber or otherwise dispose of any assets of the debtor located within the territorial jurisdiction of the United States,” the judge stated in the ruling, according to the publication.

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Teneo, a global consultancy and advisory firm, was tasked with overseeing the liquidation. The company has been given authorization to subpoena the co-founders of Three Arrows Capital, Zhu Su and Kyle Davies, as well as organizations that have conducted business with 3AC, including banks and cryptocurrency exchanges.

Adam Goldberg, an attorney for Teneo, emphasized the following at the hearing:

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“Putting the world on notice that the liquidators are currently in charge of the debtor’s assets is a key component of this motion.”

In March, 3AC was in charge of assets worth around $10 billion. On July 1, the hedge fund with its headquarters in Singapore applied for Chapter 15 bankruptcy protection in the Southern District of New York. Cross-border bankruptcy and insolvency proceedings are governed by Chapter 15.

Before filing for bankruptcy, a British Virgin Islands court mandated that 3AC’s assets be sold to pay off its debts. Partners from Teneo in the British Virgin Islands are reportedly in charge of the insolvency proceedings.

One of the main reasons for the aggressive approach, according to the lawyers for 3AC’s creditors, is that Su and Davies’ actual whereabouts are “now unknown.” The Singapore offices of Three Arrows Capital, according to the creditors, were also empty but for a few inactive computer screens.

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Su returned to Twitter on Wednesday after a month of inactivity. He shared screenshots of two emails from Three Arrows Capital’s legal counsel Advocatus Law to Teneo, writing:

“Sadly, our good faith to cooperate with the liquidators was met with baiting. Hope that they did exercise good faith wrt the Starkware token warrants.”

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