On Tuesday, a New York Judge officially froze the assets of Three Arrows Capital, the troubled crypto hedge fund that recently saw its founders disappear in the midst of its very public blowup and bankruptcy.
Judge Martin Glenn of the Southern District of New York granted the motion, according to CNBC. The judge said only the assigned liquidators can “transfer, encumber or otherwise dispose of any assets of the Debtor located within the territorial jurisdiction of the United States.”
Teneo, which was assigned to manage the liquidation, was also given authority to subpoena the two missing co-founders and other companies that have done business with the firm.
There have been fears that the firm's founders may be trying to syphon assets out of the firm ahead of the liquidation. Adam Goldberg, an attorney representing Teneo, said Tuesday: “A key part of this motion is to put the world on notice that it is the liquidators that are controlling the debtor’s assets at this stage.”
Nic Carter of Castle Island Ventures said resolution could take years: “I wouldn’t hold my breath to see the situation resolved. I’d be extremely concerned about dispositions of assets and trying to extricate them or maybe expropriate assets that are owed to creditors, and siphon those out of the process for the personal usage of the principles here.”
We noted yesterday that both founders had gone missing. Those founders, Kyle Davies and Zhu Su, had not contacted representatives setup to help liquidate the firm by a BVI judge last week, the report says. However, lawyers for the two men have reportedly said they intend on cooperating.
A photo posted by Bloomberg this week shows the company's headquarters seemingly abandoned....
3AC has been just one of the major firms - joining names like Celsius and Voyager - that have collapsed as a result of the plunge in bitcoin. Insolvency proceedings in the BVI have started, as has a Chapter 15 bankruptcy filing in the US.
Liquidators went to Three Arrows’ office address in Singapore, which "appeared dormant". Bloomberg reported:
"...the door was locked, computers were inactive and mail was stuffed under the door. People working in the surrounding offices said they hadn’t seen anyone enter or exit the office recently."
Lawyers for the two men were on a Zoom call with the liquidators last week, but it was unclear if Zhu and Kyle were even on the call:
“While persons identifying themselves as “Su Zhu” and “Kyle” were present on the Zoom call, their video was turned off and they were on mute at all times with neither of them speaking despite questions being posed to them directly.”