Bankrupt Three Arrows’ liquidators seek $1.3 billion from fund’s founders

Liquidators at bankrupt cryptocurrency hedge fund Three Arrows Capital (3AC) are in search of to get well $1.3 billion from the cofounders, an individual acquainted with the matter instructed Reuters on Tuesday, an quantity that displays losses they allegedly racked up earlier than the agency collapsed final yr.

The liquidators mentioned the allegations in opposition to Three Arrows co-founders Su Zhu and Kyle Davies at a Tuesday assembly with the hedge fund’s collectors, the individual stated.

Zhu and Davies are accused of inflicting Three Arrows to tackle vital leverage between May and June 2022 after the hedge fund suffered large losses on Luna tokens and different investments, the individual stated.

The agency was already bancrupt, liquidators contend, and they’re now taking motion in opposition to Zhu and Davies in a British Virgin Islands court docket to get well these losses for the collectors, the individual added.

Representatives for Zhu and Davies couldn’t be reached for remark instantly.

Bloomberg News first reported the event.

Three Arrows was the primary main crypto agency to go bankrupt in 2022, introduced down by the collapse of cryptocurrencies Luna and TerraUSD in May. It filed for chapter within the British Virgin Islands in late June. The liquidators have been appointed by that court docket to wind down the corporate and pay its debt. They filed a parallel chapter case in Manhattan to defend Three Arrows’ U.S. property.

Earlier this month, a set of non-fungible tokens beforehand purchased by Three Arrows was bought for $10.9 million at Sotheby’s in New York.

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