A federal judge in New York bankruptcy court has frozen the assets of crypto hedge fund Three Arrows Capital (3AC).” An important part of this move is to let the world know that it is the liquidator who controls the debtor’s assets at this stage.”
Bankruptcy Judge Freezes Assets of 3AC
Judge Martin Glenn, the U.S. Bankruptcy Judge for the Southern District of New York, granted an emergency motion Tuesday to freeze the remaining assets of bankrupt crypto hedge fund Three Arrows Capital (3AC), CNBC said it attended the hearing.
The judge noted in the order that only an assigned bankruptcy liquidator “has the authority to assign, encumber, or otherwise dispose of the debtor’s assets within the territorial jurisdiction of the United States,” the publication reported.
Teneo, a global consulting and advisory firm, was assigned to manage the liquidation. The firm was authorized to subpoena companies doing business with 3AC, including banks and crypto exchanges, as well as Three Arrows Capital co-founders Zhu Su and Kyle Davies.
Adam Goldberg, an attorney representing Teneo, stressed at the hearing.
An important part of the motion is to let the public know that it is the liquidator who controls the debtor’s assets at this stage.
3AC had about $10 billion in assets under management as of March. The Singapore-based hedge fund filed for Chapter 15 bankruptcy protection in the Southern District of New York on July 1. Chapter 15 governs cross-border bankruptcy and insolvency proceedings.
Prior to the bankruptcy filing, a court in the British Virgin Islands ordered the liquidation of 3AC’s assets to pay its debts. According to press reports, Teneo’s partners in the British Virgin Islands are in charge of the bankruptcy proceedings.
Lawyers representing 3AC’s creditors explained that one of the main reasons for their aggressive action is that the physical whereabouts of Su and Davies are “currently unknown.” The creditors also claimed that Three Arrows Capital’s offices in Singapore were vacant, except for a few inactive computer screens.
Su broke his silence a month later on Twitter on Wednesday. Posting screenshots of two emails from Three Arrows Capital’s agent, Advocatus Law, to Teneo,he wrote:
Sadly, our good faith in trying to cooperate with the liquidators was met with bait. I hope we were sincere regarding the Starkware token warrant.
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