Lawyers suspect the founders of the bankrupt cryptocurrency fund Three Arrows Capital of unwillingness to cooperate with regulators and escape – now their whereabouts are unknown.
Three Arrows Capital (TAC), a ten-year-old hedge fund, was founded by Wall Street currency traders Su Zhu and Kyle Davies. Until April of this year, TAC managed about $3 billion in assets. However, a sharp drop in the cryptocurrency market led to the fact that the fund suffered losses when liquidating exchange positions. In June, as a result of litigation of the fund’s unprofitable activities, the British Virgin Islands court ordered the liquidation of Three Arrows Capital.
Before freezing TAC’s assets, lawyers asked the court to subpoena Zhu and Davis and order them to provide information about their wallets, bank accounts, derivatives contracts, securities and other documentation. As lawyers pointed out in a recent filing in the U.S. Bankruptcy Court for the Southern District of New York, the Three Arrows Capital executives never began to cooperate with the authorized persons, and their whereabouts are now unknown.
Lawyers acting on behalf of the creditors said that the TAC co-founders were present during the proceedings, at the first meeting held via Zoom. However, their video and audio communications were turned off and all questions were answered by their legal representative. This raised suspicions whether Zhu and Davis were actually present at the meeting.
Lawyers also found TAC’s Singapore office empty, with employees from neighboring offices last seeing Three Arrows Capital staff in May or early June. The media also reported that Zhu was trying to sell his mansion in Singapore worth about $35 million, which he purchased in December 2021 through a trust fund in the name of one of his children. Given that Davis and Zhu’s current whereabouts remain unknown, all of these factors have fueled rumors that they have left Singapore.
At the end of June, the Monetary Authority of Singapore (MAS) accused Three Arrows Capital of deliberately defrauding the regulator and failing to provide information about changes in management and shareholders.
Source: Bits
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