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Singapore Crypto Fund’s $1.14bn Assets Frozen by ECourt

A British Virgin Islands court has imposed a global freeze on assets amounting to $1.14 billion belonging to the founders of Three Arrows Capital.

Key Takeaways

  • Three Arrows Capital, a Singapore-based cryptocurrency hedge fund, faces a worldwide asset freeze of $1.14 billion ordered by a British Virgin Islands court.
  • The freeze includes co-founders Su Zhu and Kyle Davies, along with Davies’ wife Kelly Chen, prohibiting any dealings with assets up to $1.144 billion.
  • The court order is seen as a legal signal to Three Arrows Capital’s affiliates and counterparts, emphasizing their obligations and risks.
  • The liquidators overseeing the bankruptcy accuse Su Zhu and Kyle Davies of non-cooperation in asset recovery efforts and failure to provide necessary information voluntarily.

Legal Action

The collapse of Singapore-based cryptocurrency hedge fund Three Arrows Capital has led to a significant legal development, as a British Virgin Islands court has issued a worldwide asset freeze totaling $1.14 billion against the fund’s founders.

The court order, effective immediately, applies to co-founders Su Zhu and Kyle Davies, as well as Kyle Davies’ wife, Kelly Chen. The freeze order not only prevents the named individuals from dealing with their assets but also serves as a clear legal signal to affiliates and counterparts associated with Three Arrows Capital.

The inclusion of Kyle Davies’ wife, Kelly Chen, in the freeze order represents an expansion of the liquidators’ efforts to recover assets. This move suggests an increased commitment to addressing potential avenues of asset dissipation or transfer.

Founder’s Legal Troubles and Regulatory Actions

Su Zhu, one of the co-founders, encountered legal troubles when he was arrested in late September while attempting to depart from Singapore.

He is currently serving a four-month imprisonment. On a regulatory front, Singapore’s monetary authority had previously imposed a nine-year ban on Su Zhu and Kyle Davies, preventing them from engaging in regulated investment activities.

Challenges in Asset Recovery

While the court-appointed liquidators are mandated to facilitate the recovery of assets and provide returns to Three Arrows Capital’s creditors, they allege a lack of cooperation from Su Zhu and Kyle Davies.

The founders are accused of not actively participating in crypto recovery efforts and failing to voluntarily furnish essential information.

To Conclude

The asset freeze imposed by the British Virgin Islands court on Three Arrows Capital’s founders represents a significant legal development in the aftermath of the fund’s collapse.

The order aims to safeguard assets amounting to $1.14 billion and sends a clear message about legal obligations. The liquidators, facing challenges in asset recovery, emphasize the non-cooperation of the founders, making the situation more complex as legal actions unfold.