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The Race: Three Arrows Capital (3AC) Founders Detained in Dubai Airport

  • Su Zhu & Kyle Davies were reportedly detained by police in Dubai while boarding a private jet to Switzerland.
  • The now insolvent Three Arrows Capital has $3.5B of debt according to affidavits.
  • The 3AC founders filed a $30M claim against their own company while on the run.

Three Arrows Capital (3AC) founders Su Zhu and Kyle Davies were identified and detained by local authorities in Dubai, UAE as they attempted to flee to Switzerland in a private jet. Further details are yet to be revealed, according to CryptoWhale.

On Monday, Teneo, the liquidation company appointed by the British Virgin Islands’ court, uploaded a 1,000-page document. The long read was taken down the same day, only to be mirrored by those who were quick enough to save it.

“Anonymous” Affidavit Reveals Debt Confusion

The extensive court document disclosed an affidavit, allegedly by one ‘Robert Gardner’, who turned out to be Kyle Davies himself. Apparently, Su Zhu had staked over $1.4 billion in the offshore fund due to market turmoil brought about by the Terra (LUNA) and Terra (UST) disaster. Allegedly, Do Kwon’s Terra (LUNA) alone is responsible for $600 million of 3AC’s losses.

Davies claimed in the affidavit that Three Arrows Capital owes $65 million to his wife Chen Kaili Kelly, and also “confirmed” Su Zhu’s claim of $5 million. The team behind Three Arrows Capital are looking to claim an additional $25 million via ThreeAC Limited, the investment project manager of the fallen crypto hedge fund.

3AC Caused Crypto Contagion, Says Analyst

Crypto analyst, and Founder of Crypto Pragmatist Jack Niewold published a quick analysis of the documents on his Twitter profile. According to him, Three Arrows Capital kept most of their investors in the dark about the “extent of the losses”.

The hedge fund’s biggest creditor was revealed to be Genesis, which is a subsidiary of Digital Currency Group. Three Arrows Capital reportedly owes the firm around $2.3 billion, while the 1,000-page summer read details a total level of debt of $3.5 billion for Three Arrows Capital. Unsurprisingly, the founders were forced to agree to participate in the emergency liquidation meeting by authorities.

That’s when the race started – in a compromise Zoom meeting that was held later, both Three Arrows Capital Co-Founders lurked in the call with both microphones and cameras off.

On the Flipside

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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Tadas Klimasevskis is a blockchain journalist and content creator, focusing on the latest tendencies of the crypto world and digging deeper into specific innovations like music NFTs, gaming NFTs and Metaverse. Vast experience in social media lets Tadas quickly spot what’s going on in the crypto industry and deliver a story with a unique spin.