Liquidators of crypto hedge fund Three Arrows may claim US assets

July 12 (Reuters) – The liquidators of cryptocurrency hedge fund Three Arrows Capital (3AC) received permission from a U.S. court on Tuesday to issue a subpoena to claim the assets of the bankrupt Singapore-based company, noting that 3AC’s missing founders are no longer in control. her accounts.

U.S. Bankruptcy Judge Martin Glenn in Manhattan has given liquidators the authority to seize 3AC’s U.S.-based assets and issue subpoenas to its founders and about two dozen banks and cryptocurrency exchanges that may have information about its assets and transfers.

The liquidators’ lawyer, Adam Goldberg, said in an emergency hearing before Glenn on Tuesday that the whereabouts of the company’s founders, Zhu Su and Kyle Livingstone Davies, remained unknown. read more

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Without the cooperation of the founders, the liquidators could not get a complete picture of 3AC’s assets and their location, Goldberg said. He said the digital nature of the asset poses a real risk that it will be removed by the founders or other parties unless a court order is stopped.

“The most important part of this order is to put the world on notice that the debtor’s assets are currently under the control of the liquidators,” Goldberg said.

Zhu and Davies did not appear in bankruptcy court and did not oppose the liquidators’ application for a subpoena. Zhu tweeted for the first time in nearly a month on Tuesday that the liquidators had rejected their good faith offer to cooperate.

According to the case submitted to the court of liquidators, 3AC, which earlier in 2022 had $10 billion in cryptocurrencies, up from $3 billion in April. In late June, the British Virgin Islands company filed for bankruptcy after being hit by a major selloff in digital currencies. read more

3AC’s insolvency destabilized other crypto lenders, such as Voyager Digital, which filed for bankruptcy after 3AC defaulted on roughly $650 million in loans.

Liquidators have been appointed by the British Virgin Islands court to wind up the company and pay the debts. They filed a parallel bankruptcy case in Manhattan to protect 3AC’s US assets.

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Reporting by Dietrich Knauth, editing by Alexia Garamfalvi and Richard Chang

Our standards: Thomson Reuters Trust Principles.

Godfrey Kemp

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