3AC liquidators seek $1.3 billion from founders

Liquidators of Three Arrows Capital (3AC) have filed suit against the hedge fund’s co-founders Su Zhu and Kyle Davies, seeking to recover $1.3 billion. The amount is said to have been raised shortly before the collapse of 3AC, according to The Block.

The stated amount is included in the firm’s total claims of $3.3 billion.

According to the outlet, the liquidators discussed the charges against the 3AC co-founders at a meeting with the hedge fund’s creditors.

The document states that from May to June 2022 Su Zhu and Kyle Davies increased leverage after the hedge fund had suffered substantial losses from investments in LUNA tokens. According to the liquidators, the firm was insolvent at that time.

The current allegations increase the volume of claims against Su Zhu and Kyle Davies. Earlier, the liquidators noted insufficient cooperation from the co-founders in the investigation.

In June 2022, a Virgin Islands court ordered the liquidation of Three Arrows Capital. In July the firm filed for bankruptcy protection in the United States.

In December, 3AC’s liquidators recovered $35.6 million belonging to the crypto hedge fund in Singapore’s banks, and filed a petition to sell a $30 million superyacht.

In the same month, the court approved subpoenas for Su Zhu and Kyle Davies.

In April 2023, the 3AC co-founders launched the cryptocurrency exchange OPNX.