Liquidators from Three Arrows Capital seek $1.3B from bankrupt hedge fund founders.
The liquidators of Three Arrows Capital (3AC) are seeking $1.3 billion from the bankrupt crypto hedge fund’s founders. They claim that the founders took on additional debt in the months leading up to the fund’s collapse, despite already being insolvent. According to Bloomberg, the liquidators, who are partners at consulting firm Teneo, discussed these allegations with Three Arrows creditors. The fund suffered major losses due to the collapse of the Terra ecosystem, which began in May 2022, and founders Su Zhu and Kyle Davies took on more leverage. The liquidators are now attempting to recover the funds in a British Virgin Islands court. The collapse of 3AC was one of the events that contributed to the crypto winter of last year, leading to the bankruptcy of other crypto firms with exposure to the hedge fund, including Voyager Digital, Celsius Network, and Genesis Asia Pacific. Teneo confirmed the accuracy of the report to blockchain but declined to comment further.
Read More: Bankrupt Hedge Fund 3AC’s Return as a VC Stirring Up Crypto Community
Edited by Sheldon Reback.
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