A judge in a New York bankruptcy court has frozen the assets of cryptocurrency hedge fund Three Arrows Capital.
Three Arrows had managed $10 billion U.S. in assets. But now, the hedge fund has been forced into liquidation and its two co-founders have gone into hiding to avoid creditors.
Judge Martin Glenn of the Southern District Court of New York said that advisory firm Teneo, which was assigned to manage the Three Arrows liquidation, can also subpoena Three Arrows co-founders Zhu Su and Kyle Davies, forcing them to appear in court.
The concern is that the leaders of Three Arrows Capital, commonly known as “3AC,” might be stealing or hiding funds ahead of the liquidation. Zhu has reportedly put his $35 million U.S. Singapore mansion up for sale, and there are reports of non-fungible tokens (NFTs) being transferred from Three Arrows.
Lawyers for Zhu and Davies have said that their current whereabouts are unknown and that they haven’t engaged in the liquidation process. Liquidators are looking for documents such as account statements and digital wallet information to help them recover money and repay the hedge fund’s debts.
Liquidators have also reportedly found that Three Arrows’ offices in Singapore are vacant and only contain a few inactive computer screens.
Zhu Su continues to be active on Twitter, but his location is not known, said his lawyers.
Three Arrows Capital is one of several cryptocurrency firms to halt customer withdrawals due to a liquidity crunch prompted by the sharp selloff in prices for digital coins and tokens.
Earlier in July, a court in the British Virgin Islands forced Three Arrows into liquidation so that funds can be recovered to pay back clients of the hedge fund.
