Su Zhu Hits Back at 3AC’s Liquidators From Bangkok: Report

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Zhu hand-delivered an affidavit in Bangkok on August 19, Bloomberg has reported. 

Zhu Says Liquidators Misled Court 

Su Zhu is still pushing back against Three Arrows Capital’s liquidators.

According to a Friday Bloomberg report, the co-founder of the bankrupt crypto hedge fund delivered an affidavit in Bangkok on August 19, claiming that the firm’s liquidators had used “misleading and inaccurate” information in their case in the High Court of Singapore. 

Teneo, the firm responsible for liquidating Three Arrows’ remaining assets in the fallout from the firm’s June blow-up, was approved by the Singapore High Court to begin liquidation proceedings Wednesday. Teneo had previously claimed that Zhu and his co-founder Kyle Davies had been uncooperative in the process, leading Zhu to put out a tweet accusing the firm of “baiting.” 

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. pic.twitter.com/CF73xI8r6n

— 朱溯 🐂 (@zhusu) July 12, 2022

After Three Arrows collapsed during the market crash, Zhu and Davies went silent and were accused of avoiding questions from creditors and liquidators. They were widely thought to be on the run, until in a July 22 Bloomberg interview the pair revealed that they were intending to travel to Dubai (Three Arrows was due to relocate from Singapore to Dubai prior to its implosion). 

Zhu’s note delivered in Thailand marks the latest development in the weeks-long tussle between Three Arrows and its liquidators. According to the Bloomberg report, Zhu has argued that Teneo “had not provided an entirely complete or accurate version of events” related to Three Arrows and its assets.

“Potentially Draconian Consequences” 

In the affidavit, Zhu reportedly outlined a network of Three Arrows-related entities registered in Singapore, Delaware, and the British Virgin Islands. Key to this network is Three Arrows Capital Pte Ltd, a firm Zhu is a director of that launched in 2013 and was registered until July 31, 2021. According to the report, Zhu has said that this firm may not be able to meet with the liquidator’s demands, and that he fears “potentially draconian consequences” if Teneo is allowed to exercise its powers to liquidate assets from the entity. He also claimed that he and other representatives related to Three Arrows Capital Pte Ltd could face fines or jail, the report said.  

Until the market crashed in June, Three Arrows was crypto’s most prolific hedge fund. It ran into problems after betting big on LUNA, Terra’s volatile token that crashed to zero as UST lost its peg in May. It then transpired that the firm had defaulted on multiple nine to 10-figure loans from the likes of Genesis Trading and Voyager Digital after Bitcoin dropped to its lowest level in 18 months, wiping out several crypto lenders as a result. Three Arrows filed for Chapter 15 bankruptcy in July and Zhu and Davies have mostly stayed quiet since. 

Update: Crypto Briefing reached out to Teneo for comment, and the firm responded with the following statement:

“The joint liquidators strongly disagree with the positions set out in Su Zhu’s affidavit. Su Zhu’s affidavit was made in support of an application by Three Arrows Capital’s former investment manager seeking to set aside orders made by the Singapore court requiring relevant parties in Singapore to cooperate with the liquidators in the sharing of information relating to the affairs and assets of Three Arrows Capital. The joint liquidators have submitted their responses to the Singapore court and the application will be heard next month. It will not be appropriate to comment on the substance of matters that have been placed before the Singapore court for its pending determination. In any situation such as this however, liquidators rely on full and immediate cooperation from relevant parties, including those situated in Singapore. We remain optimistic that such parties will provide access to complete records and all relevant information to enable us to discharge our responsibilities fully in the interests of the creditors of Three Arrows Capital.”

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies. 

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