Benzinga - A court in the British Virgin Islands has ordered the freezing of approximately $1 billion in assets belonging to the founders of cryptocurrency hedge fund Three Arrows Capital as per the liquidator's report.
The court's directive restricts Su Zhu, Kyle Davies, and Davies’ wife Kelly Chen from moving or disposing of assets valued at up to $1.14 billion.
Teneo, the appointed liquidator, disclosed the information to Bloomberg in a statement via email. The liquidator also noted that the estimated debt owed to creditors is around $3.3 billion.
Three Arrows Capital, previously one of the most significant crypto-native hedge funds, experienced a downfall in 2022 following a series of unprofitable investments. The collapse was part of a broader downturn in the cryptocurrency sector, which saw multiple failures.
Teneo explained the rationale behind the court's decision, stating, “The worldwide freezing order has been sought in connection with claims that are being pursued by the liquidators that allege, amongst other things, that the founders should be held responsible for causing 3AC’s position to deteriorate by an amount that is equivalent to the value of the freezing orders sought.”
Formerly based in Singapore, Three Arrows Capital declared bankruptcy in the British Virgin Islands.
Teneo, serving as the liquidator after being appointed by a court in the British Virgin Islands, has previously accused the fund's founders of not providing sufficient cooperation.
Also Read: Sen. Marshall Highlights Banking Sector's Assistance In Drafting Crypto Regulation Bill: 'That's About All I Know About Crypto'
This latest development follows closely on the heels of a local asset freeze ordered by the Singapore Court, as reported by Teneo.
Additionally, Zhu's recent arrest at Singapore’s Changi Airport in September, while attempting to leave the country, is noteworthy. Singaporean authorities have since prohibited Zhu and Davies from engaging in any regulated activities within the country.
Both Zhu and Davies were once celebrated figures during the cryptocurrency boom.
However, their reputations and fortunes have taken a hit due to revelations of high-risk practices in the crypto world.
This situation mirrors that of Sam Bankman-Fried, the founder of FTX Trading Ltd. (CRYPTO: FTT), who was convicted of fraud last month following a trial that highlighted testimonies from some of his former close associates.
Read Next: Floki, Baby Doge Eat Dust To Coq Inu's Crowning Glory: This Meme Coin Ain't Just Feathers Anymore
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.