3AC Founder Zhu Su Speaks Out, Says Attempt to Cooperate Met with Baiting
Three Arrows Capital (3AC) co-founder Su Zhu has accused the firm’s liquidators of “baiting.” The move comes shortly after the liquidators claimed they have no information of the “physical whereabouts” of 3AC’s founders in a court filing.
Liquidators Claim 3AC Founders Are Missing, Su Zhu Calls it “Baiting”
In a court filing on Friday, liquidators of 3AC Russell Crumpler and Christopher Farmer claimed that founders of the cryptocurrency hedge fund Su Zhu and Kyle Davies are missing. The liquidators said the founders’ whereabouts are currently unknown, and that they have not received “any meaningful cooperation” from the duo.
“The physical whereabouts of the debtor’s founders, Zhu Su and Kyle Livingstone Davies, are currently unknown,” the liquidators reportedly said. “the founders have not yet begun to cooperate… in any meaningful manner.”
The liquidators also alleged they joined a Zoom call with “persons identifying themselves as ‘Su Zhu’ and ‘Kyle,” but “their video was turned off and they were on mute at all times with neither of them speaking despite questions being posed to them directly.”
However, Zhu has refuted this claim in a recent tweet. “Sadly, our good faith to cooperate with the Liquidators was met with baiting,” Zhu said in the tweet, which also contained screenshots of two emails that were addressed to Russell, apparently the company’s liquidator.
In one of the emails, Christopher Anand Daniel of Advocatus Law, a law firm based in Singapore, referring to the liquidators’ filing about 3AC not cooperating, said: “It now appears clear why your Singapore solicitors were keen to ask if the discussions were on a “without prejudice” basis. It was to use the discussions in Court filings without notice to our clients,” adding:
“It appears, therefore, that contrary to your representations that you were seeking to engage our clients in good faith, and constructively, you had already prepared to make that application, and were in fact baiting our clients.”
The second screenshot addresses the company’s relationship with the crypto startup StarkWare. 3AC had invested in the business, which recently hit a valuation of $8 billion. In the email, Daniel expressed concern about whether 3AC’s liquidators had exercised the right to buy a StarkWare token.
“In these capacities, they are extremely concerned by the Liquidators’ failure to exercise StarkWare’s token purchase offer (“StarkWare Exercise”), a fact that was confirmed by you in the call on 8 July 2022.”
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3AC Ordered to be Liquidated in June
Founded in 2012, 3AC was a prominent crypto hedge fund with a focus on investments in digital assets. The fund, known for its highly leveraged bets, reportedly suffered major losses from the implosion of Terra and faced more troubles as the crypto meltdown continued.
In mid-June, rumors of 3AC’s possible issues surfaced on Crypto Twitter and spread over the course of the day. Subsequently, Zhu posted a cryptic tweet saying that the firm is “committed to working this out.” The rumors around 3AC came shortly after crypto lender Celsius halted withdrawals citing “extreme” market conditions.
As reported, the crypto fund was ordered to liquidate on 27 June 2022 by a court in the British Virgin Islands. Partners from Teneo, a NY-based company specializing in corporate consultancy and insolvency, were charged with overseeing the insolvency of the crypto fund.
3AC filed for Chapter 15 bankruptcy earlier this month, a move designed to protect foreign companies’ assets from creditors in the US. The bankruptcy filing came after the crypto fund defaulted on a $670 million loan provided by crypto broker Voyager Digital, which has since filed for bankruptcy as well.
Why do you think 3AC’s liquidators claimed the firm’s founders are missing? Let us know in the comments below.