3AC founders’ assets frozen: S$1.33B worth

SINGAPORE: Assets worth about US$1 billion (S$1.33 billion) belonging to Zhu Su and Kyle Davies have been frozen by a court in the British Virgin Islands, Bloomberg reported on Thursday (Dec 21).

Su and Davies are the founders of failed crypto hedge fund Three Arrows Capital (3AC), which collapsed in 2022 amid the downturn of digital currencies worldwide. Before that, it had been one of the best-known crypto hedge funds globally and had managed around $10 billion in assets until March of that year.

The crypto hedge fund owes 27 different creditors a whopping US$3.3 billion (S$4.4 billion), including over US$2 billion (S$2.67 billion) to Genesis Global Trading, a digital currency lender.

Bloomberg reported that Zhu and Davies, as well as Zhu’s wife Kelly Chen, are prevented from selling or transferring assets of up to US$1.14 billion (S$1.42 billion), quoting an email from Teneo, the management consultant firm assigned as the joint liquidator for 3AC after its failure.

Teneo said, “The worldwide freezing order has been sought in connection with claims that are being pursued by the liquidators that allege, amongst other things, that the founders should be held responsible for causing 3AC’s position to deteriorate by an amount that is equivalent to the value of the freezing orders sought.”

The announcement regarding Zhu and Davies’ frozen assets came one day after the Singapore court also issued a domestic freezing order, Bloomberg noted Teneo as saying.

In September, Zhu was reportedly arrested at Changi Airport as he was trying to leave Singapore and given a four-month prison sentence under a committal order due to his failure to cooperate with Teneo in investigations into 3AC. Davies was given the same committal order, although he remains at large.

Zhu appeared in court earlier this month for private proceedings this week, facing questions from lawyers for Teneo. Zhu’s court appearance provides Teneo with the best opportunity to gather information to regain the billions poured into 3AC. This includes determining where the company’s assets are and how 3AC failed.

Zhu and Davies founded 3AC in 2012 at the kitchen table of their US apartment. The two men were then working as traders at Credit Suisse. At one point, their crypto assets were allegedly worth several billion dollars.

The Monetary Authority of Singapore reprimanded 3AC on June 30, 2022, because it had provided false information and breached industry licensing rules for fund management.

Read also: Rise & fall of 3AC founder Su Zhu: From crypto king to arrest at Changi Airport /TISG