Three Arrows liquidators are asking a US court to force crypto-entrepreneurs to cooperate

Mining facilities for cryptocurrency are seen in Pristina, Kosovo 12 June 2018. Photo taken 12 June 2018. REUTERS / Hazir Reka

Reuters – Representatives of Three Arrows Capital (3AC) have asked a U.S. bankruptcy court in Manhattan to force the founders of the cryptocurrency hedge fund to participate in the liquidation process, saying they cannot be located and have turned down requests for necessary information.

The court scheduled an emergency meeting Tuesday to address concerns raised by the company’s liquidators.

Singapore-based 3AC, which was reported to have $ 10 billion in cryptocurrency earlier in 2022, had $ 3 billion in assets as of April, according to the liquidators’ court archives. The company filed for bankruptcy in the British Virgin Islands in late June after being hit by strong digital currency sales.

3AC’s insolvency has destabilized other cryptocurrencies such as Voyager Digital, which filed for bankruptcy after 3AC failed to repay a loan of around $ 650 million in cryptocurrency, and Blockchain.com, which lent $ 270 million to 3AC.

3AC liquidators Russell Crumpler and Christopher Farmer said in a lawsuit on Friday that they could not find 3AC’s founders, Zhu Su and Kyle Livingstone Davies. Crumpler and Farmer were appointed by a court in the British Virgin Islands to represent the company, wind up operations and repay creditors. They filed a parallel bankruptcy case in New York to protect 3AC’s US assets and gain international recognition of the liquidation proceedings.

The liquidators said that Su and Davies have not yet started cooperating in the liquidation work, and that they are not only concerned about delays in their work, but the “actual and imminent risk” that the founders or other parties will remove 3AC’s cryptocurrency assets. .

They require immediate access to 3AC’s Singapore offices and information on 3AC’s bank accounts and digital wallets.

The liquidators said they had Zoom and email communications with a Singapore law firm purporting to represent Zhu and Davies, but could not be sure they were actually reaching the founders. In a recent Zoom conversation, the names of Su and Davies appeared, but their video was turned off and they were on mute all the time. None of them answered direct questions about the call, according to the liquidators.

They also said that they had been to 3AC’s Singapore office, but that they could not enter because the door was locked. Post had piled up unanswered at the door, and neighbors said no one had been in the offices since late May or early June, according to the court document.

Zhu is trying to sell a mansion in Singapore that could be worth tens of millions of dollars, according to the court document.

The case is In re Three Arrows Capital, US Bankruptcy Court for Southern District of New York, No. 22-10920.

For the liquidators: Adam J. Goldberg of Latham & Watkins.

Read more:

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Crypto broker Voyager Digital sends standard alert to Three Arrows Capital

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Blockchain.com meets $ 270 million in loans to bankrupt Three Arrows

Crypto lender Voyager addresses customers’ anger in the first bankruptcy hearing

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