Liquidators of troubled crypto lender Three Arrows Capital have received the legal backing of the Singaporean High Court to further probe and liquidate the hedge fund’s assets. This is according to a Bloomberg report citing familiar sources.
The British Virgin Islands Court in charge of 3AC’s bankruptcy proceeding had earlier appointed Teneo, a New York-based restructuring firm in June to oversee the liquidation process. As a Three Arrows Capital liquidator, Teneo was tasked with securing all of the firm’s global assets and advising on restructuring.
Teneo had earlier sought recognition and approval from the Singaporean High court to secure assets of the hedge fund in Singapore.
With the court’s approval Teneo can now request and have access to all of 3AC’s financial records held in Singapore. This includes bank records, real estate, and digital assets like cryptocurrencies, and shares amongst others.
Three Arrows Capital started in Singapore before it shifted base to the British Virgin Highland last year.
Following the court’s orders, the hedge fund’s founders Su Zhu and Kyle Davis will be restricted from selling their assets in Singapore.
Earlier in July, Su Zhu came under scrutiny for trying to sell one of his luxurious homes in Singapore. The “good-class” bungalow which occupies over 30,000 square feet is reportedly worth $35 million.
Although Teneo says the hedge fund’s founders are uncooperative, it has so far gained access to about $40 million of its assets. This figure is a far cry from creditors’ claims of $2.8 billion.
Three Arrows Capital’s Journey to Bankruptcy
Three Arrows Capital’s road to bankruptcy began around June. The Singaporean firm filed for chapter 15 bankruptcy protection at the end of June after a steady decline of market prices in the wake of the Terra-Luna crash.
Before then, it had taken multiple loans from creditors including Voyager Digital and Genesis Trading.
Its inability to repay its $670 million loan led to Voyager filing for bankruptcy while other creditors reported losses in millions.
After the hedge fund’s collapse, its once vocal founders suddenly went below the radar and remained quiet. In their defense, the founders said they had received threats to their lives.