Crypto hedge fund Three Arrows Capital filed for Chapter 15 bankruptcy protection earlier this month. Since then, the beleaguered fund's legal team has said the whereabouts of its co-founders — Su Zhu and Kyle Davies — are untraceable.
Zhu and Davies even missed their court date to meet liquidators in New York, stating via Twitter (NYSE:TWTR): “Sadly, our good faith to cooperate with the Liquidators was met with baiting. Hope that they did exercise good faith wrt the StarkWare token warrants.”
What Happened: According to court documents filed with the U.S. Bankruptcy Court of the Southern District of New York, "Mr. Davies and Mr. Zhu’s current location remains unknown."
The documents go on to say that the founders are not cooperating with the liquidation process “in any meaningful manner.”
The two crypto entrepreneurs are believed to have "left Singapore,” the legal team added.
Earlier this month, Three Arrows Capital, or "3AC," declared bankruptcy after defaulting on a $650 million loan from Voyager Digital Ltd. The crypto hedge fund formerly managed $10 billion worth of assets.
Why It Matters: The past few months had seen a severe liquidity crisis for 3AC. Judge Martin Glenn of the Southern District of New York froze the company's funds and, as part of the liquidation process, numerous fund creditors seek to freeze 3AC’s assets.
The liquidator’s court hearing was set for July 12, 2022 at 9 a.m. EST as per an emergency motion filed last week in New York.
Christopher Anand Daniel, a senior partner at law firm Advocatus, stated in an email that Russell Crumpler, one of the 3AC liquidators, informed a U.S. court about Zhu and Davies’ apparent non-cooperation and was thus “baiting them.”
Following their absence in court, Davies has been subpoenaed and required to submit documents and give his testimony on July 19.
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