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Three Arrows Capital (3AC) Files $30M Lawsuit Against Own Company While on the Run

  • 3AC Co-Founder Su Zhu claims $5 million as creditor, though his whereabouts are still unknown.
  • Investment manager ThreeAC Limited added a further $25M to the claim.
  • Three Arrows Capital’s debt totals $3.5B, owing most to Genesis.
  • The now insolvent company lost a whopping $600M to Terra (LUNA).

The crypto storm has brought a boatload of trouble to the doorstep of now defunct crypto hedge fund Three Arrows Capital. Last week, 3AC (Three Arrows Capital) execs seemingly fled the scene, leaving behind an empty office with dusty old mail piled up on the table. Singapore authorities turned up the heat on Three Arrows Capital with a reprimand letter and an emergency meeting request. Furthermore, affidavits describing the bankruptcy surfaced, with 3AC’s debt to creditors summing up to a gigantic $3.5 billion.

While on the run, Su Zhu has claimed for $5 million as a creditor of Three Arrows Capital. Moreover, ThreeAC Limited, the only investment manager of Three Arrows Capital, applied a further $25 million to the claim. The bold move comes after weeks of silence on social media; in Su Zhu’s last Twitter message, he expressed concern about the manners of 3AC’s liquidators.

Big Players in the Crypto Game Are Losing Patience with 3AC

Crypto lender Genesis Global Trending is likely on the hunt for its $2.36 billion, as the company loaned the massive amount with an 80% required margin, which 3AC failed to meet. Moreover, Blockchain.com’s Chief Strategy Officer Charles McGarraugh disclosed a conversation with Kyle Davies of 3AC, in which it was implied that Three Arrows Capital had attempted to borrow a further 500 Bitcoin (BTC) from Genesis on June 13th. It has been suggested that the move was likely made due to margin calls on other platforms, indicating a “borrow from Peter to pay Paul” situation.

Crumpler on Three Arrows Capital’s Tail

Crumpler and Farmer, the two liquidators appointed by the British Virgin Islands, were disatisfied with the revelation of the empty 3AC office. A Zoom meeting was scheduled to be held a few days after the discovery, however, Crumpler and Farmer later reported that Three Arrows Capital, along with their legal team, had all failed to attend the online meeting. “Founders of the clearly insolvent Company should not be allowed to deal with what may be assets of the Company” asserted Crumpler.

Sailing Away from Trouble in a Fancy Yacht

According to the bankruptcy affidavits, the duo of Su Zhu and Kyle Davies put down $50 million to purchase the biggest yacht in Singapore. The submitted document reveals that there is a high likelihood that the luxury yacht was “purchased with borrowed funds”. Ultimately, the yacht is set to be delivered to Italy in two months.

3AC Knocked Down by Terra Luna Fiasco

Do Kwon’s infamous Terra (LUNA) and Terra (UST) blockchain imploded back in May, leaving many investors with empty pockets. Three Arrows Capital (3AC) were among the investors to lose heavily, seeing around $600 million liquidated in Terra (LUNA). The Co-Founder tandem of Su Zhu and Kyle Davies were cagey about how much hedge fund had actually allocated into Terra Luna and Terraform Labs.

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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Author

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.