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Liquidators can subpoena the 3AC founders despite "difficult challenges" with crypto assets

13-Jul-2022 By: Simran Mishra
Liquidators can subp

Liquidators can subpoena the 3AC founders despite "difficult challenges" with crypto assets

Su Zhu and Kyle Davies, the co-founders of cryptocurrency investment firm Three Arrows Capital (3AC), have been subpoenaed by liquidators with approval from a United States (U.S.) court.

Sources claim that U.S. Bankruptcy Judge Martin Glenn granted the subpoenas on Tuesday after being informed by the liquidators' attorney that the founders' locations are unknown and there are concerns they may be liquidating tens of millions of dollars' worth of assets.

The counsel, Adam Goldberg, claimed he was unaware of Zhu's or Davies' present whereabouts and claimed they had not offered the liquidators "serious cooperation."

Goldberg allayed concerns that 3AC may be selling assets by referencing media rumours that Zhu was selling a Singapore property worth millions.

Martin Glenn, the presiding judge, admitted that accessing the firm's crypto wallets posed "tricky challenges" when trying to collect cryptocurrency assets from the company.

On July 12, sources claimed that Goldberg believes that the cryptocurrency wallets are subject to U.S. jurisdiction and that his client now has discretion over those funds.

Goldberg said, "a crucial part of this action is to inform the public that the liquidators are now in command of the debtor's assets."

Three Arrows Capital (3AC), a well-known investment company located in Singapore which was established in 2012, had over $18 billion in assets under management as of April. But, with the LUNA token meltdown in May, it's possible that a sizable percentage of that net worth was lost.

Since then, 3AC has defaulted on nearly $1.5 billion in debts from cryptocurrency lenders BlockFi and Voyager Digital.

Since June 14, the two founders of 3AC, Zhu and Davies, have likewise been largely radio quiet and their whereabouts have remained unknown.

Since June, the layers of 3AC's alleged activities have come to light, resulting in liquidations in the British Virgin Islands and financial crises on a number of cryptocurrency exchanges.

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