- Liquidators have requested to freeze assets of Three Arrows Capital after being unable to find its founders.
- Three Arrows defaulted on a $670 million loan, leading them to file for bankruptcy last week.
- An emergency court hearing regarding the case is scheduled for Tuesday morning.
The founders of Three Arrows Capital, Kyle Davies and Zhu Su, are not cooperating with liquidators after their crypto hedge fund filed for bankruptcy, according to Bloomberg.
In court documents, Teneo, the advisory firm expected to liquidate the remaining assets of Three Arrows, said that Davies and Zhu had not been giving "meaningful cooperation" throughout the liquidation process, and that their whereabouts were unknown.
Lawyers for Davies and Zhu have said the two would cooperate throughout the liquidation. But while they appeared to be on a Zoom call last week, users identifying themselves as "Su Zhu" and "Kyle" didn't communicate with the liquidators, keeping their video and microphones turned off.
Liquidators also visited the Three Arrows Capital headquarters in Singapore last month, where they were unable to find Davies and Zhu. As of Friday's filing, Teneo has been unable to locate the founders.
Teneo has requested to freeze the crypto hedge's assets and are also requesting a subpoena on Davies and Zhu, looking for information on company records, assets, and other accounts, CoinDesk reported.
The cryptocurrency hedge fund has the potential to empty its funds pre-liquidation, since cryptocurrencies are immediately transferable, Teneo's legal team said. An emergency court hearing regarding the case is scheduled for tomorrow morning.
In June, Three Arrows defaulted on a $670 million loan to Voyager Digital after investor sell-offs slammed the cryptocurrency sphere. When Three Arrows defaulted, the hedge fund held just $685 million in assets despite loaning out $1.2 billion.