What is the Impact of a $1B Worldwide Asset Freeze on Web 3.0 Founders?

Three Arrows Capital Bankruptcy Saga

The bankruptcy saga of Singapore-based cryptocurrency hedge fund Three Arrows Capital (3AC) has taken a new turn, with a court freezing assets worth over a billion dollars belonging to the firm’s founders.

As reported by Bloomberg on Dec. 21, a court in the British Virgin Islands has issued a restraining order prohibiting 3AC co-founders Su Zhu and Kyle Davies from transferring or selling assets worth up to $1.14 billion. The order also applies to assets owned by Davies’ wife Kelly Chen.

According to the liquidator Teneo, 3AC creditors are owed around $3.3 billion in the aftermath of the hedge fund’s collapse in 2022. The worldwide freezing order was sought by Teneo in connection with its allegations that the founders should be held accountable for the decline in 3AC’s value, which is equal to the amount of the freezing orders sought.

In addition to the international order, the Singapore Court has also issued a domestic freezing order against the 3AC founders.

The Crypto Hedge Fund and the Arrest of its Founders

Teneo didn’t reply to Cointelegraph’s request for comment.

Founded in 2012, 3AC was one of the largest crypto hedge funds in the world before it failed to meet margin calls from its lenders and filed for bankruptcy during the 2022 crypto bear market. In September 2023, Zhu was arrested in Singapore when he purportedly tried to escape after a local court sentenced him to four months of imprisonment. Davies, who was also issued a committal order for imprisonment, is reportedly still at large.

The local central bank also barred both Zhu and Davies from participating in regulated activities in Singapore for nine years.