Recently, reports about the collapsed Three Arrows Capital abruptly became trendy shortly after the co-founder of the firm, Su Zhu, who had been on the run, suddenly surfaced at the high court presiding over the case in Singapore. Zhu was reportedly questioned about the location of the remaining missing assets of the crypto hedge fund by one of the liquidators placed in charge of liquidating the assets of the failed firm.
Su Zhu Questioned After Being Captured
According to the court filings, Su Zhu is the responsible party involved in the ‘Examination of Enforcement Respondent’ schedule by the law court. It is worthy to note that Su Zhu was captured while trying to board a plane to Dubai by the enforcement agents of Singapore on the 29th of September. Meanwhile, it was reported that 3AC liquidators Crumpler & Farmer had gone after the two co-founders of 3AC crypto hedge fund, Su Zhu and Kyle Davies, for more than a year. Due to the calamities, Su Zhu and Kyle Davies had been ordered by authorities to refrain from executing any business deal in Singapore for the next nine years, effective in September. Meanwhile, an undisclosed person who seemed to know more about the issue stated that Su Zhu is bound to be discharged from jail in December for good deeds. He pointed out that the current court case against Zhu and Davies is civil since neither has been charged with criminal offenses.
Liquidators Aimed To Recover $3.3 Billion 3AC’s Assets
So far, the collaborative effort exerted by the liquidators in charge of 3AC’s case has proved partially successful. Many blue-chip non-fungible tokens (NFTs) auctioned to recover the lost funds have been successfully sold off, including some of the popular fancy NFTs created by the firm. For instance, “The Goose” NFT collection sold massively, generating a huge sum of $6.2 million during the auction exercise done at Sotheby’s house. Furthermore, the work of art by Dmitri Cherniak was the second biggest NFT sold physically at the auction.
In addition, reports revealed that Crumpler & Farmer recently made a transfer of 4.45 million DYDX which is worth about $12.7 million at current prices to Binance – possible to refund the victims of 3AC collapse on the platform. It is worth noting that the details of where the remaining assets of 3AC are would be disclosed between creditors, according to the report. In addition, the cumulative debt owed to creditors of the collapsed firms is reportedly worth about $3.3 billion, a figure which is about 200 million short of the initial amount announced during the bankruptcy filing of 3AC in June 2022 as a little portion of the assets owned by the firm had been auctioned off.
Three Arrows Capital’s Sudden Failure
According to the report, the sudden failure of Three Arrows Capital in June 2022 resulted in a massive loss of about $2 trillion in digital assets and created a ripple effect that crumbled many partnering firms and other associate hedge funds. The affected firms included Voyager Digital, Celsius, and Genesis crypto hedge funds, meanwhile, it was reported that 3AC had a significant investment exposure to UST, Terraform Labs’ stablecoin which de-pegged last year. However, reports revealed that 3AC practiced some highly-risky investment with creditors’ funds by betting heavily on Staked Ether, which was popularly believed to be pegged with Ethereum’s price. Unfortunately, the tough tides against the general crypto market in 2022 hugely affected Staked Ether (stETH), causing it to de-peg from Lido’s staking outlet momentarily, thereby causing a massive sell-off of stETH.
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