- The British Virgin Islands court has issued an order to freeze $1.1 billion in assets belonging to Three Arrows Capital founders Su Zhu, Kyle Davies, and Davies’ wife Kelly Chen
- The trio is restricted from moving or selling assets, highlighting their legal obligations and associated risks.
- The order aims to secure assets for eventual enforcement by liquidators overseeing Three Arrows’ insolvency, declared by the court in June last year.
The British Virgin Islands court has issued an order to prevent the founders of defunct hedge fund Three Arrows Capital from disposing of assets, effectively freezing $1.1 billion in assets. The order stops co-founders Su Zhu, Kyle Davies, and Davies’ wife Kelly Chen from moving or selling any of their assets, emphasizing their legal obligations and associated risks during the ongoing liquidation process. The move is aimed at securing assets for eventual enforcement by liquidators overseeing Three Arrows’ insolvency which was declared by the court in June last year.
Teneo Says Asset Freeze is Commensurate
Three Arrows Capital faced financial turmoil after its investments in TerraUSD and other assets went to pot during the crypto contagion outbreak, made worse when crypto broker Voyager Digital demanded the repayment of a loan comprising 15,250 BTC and 350 million USDC. The British Virgin Islands court ordered its liquidation in the days following this demand, which had a knock-on effect on the rest of the crypto community.
Teneo noted that the worldwide freezing was an important step towards the founders being held responsible for causing Three Arrows’ position to deteriorate by an amount that is equivalent to the value of the freezing orders sought.
Zhu Faces Prison
The liquidator, Teneo, has repeatedly complained over the lack of cooperation from the founders, which no doubt helped the judge come to his decision over the asset freezing request.
In September this year, Zhu was detained by authorities in Singapore while attempting to leave the country and faces a potential four-month jail sentence for failure to cooperate with investigators. However, reports suggest he is set to be released soon, attributed to good behavior during his detainment.
