The liquidator of Three Arrows Capital accused the co-founders of the fund of embezzlement of assets

Article Reading Time:
2 minutes.

Consulting agency Teneo claims that the Three Arrows Capital fund, despite problems with returning capital to investors, continued to trade cryptocurrencies.

Agency responsible for restructuringThree Arrows Capital (TAC) has released a court filing from crisis manager Russell Crumpler alleging that fund co-founders Su Zhu and Kyle Davies made a down payment on a $50 million yacht.

The yacht was due to be delivered to Italy atwithin two months after the last payment. The document claims that Davis wanted the vessel to be "larger than any yacht owned by even Singapore's wealthiest billionaires."

It is assumed that the co-founders producedpayment with borrowed funds, ignoring attempts by creditors to get in touch. The document states that Zhu and his wife purchased two VIP bungalows in Singapore for between $28.5 million and $48.8 million over the past two years.

Financial documents confirmingacquisition, were provided as evidence that the co-founders used company assets for personal purchases. The founders of a clearly insolvent company should not be allowed to dispose of what could be its assets,” the liquidators assure.

Teneo Lawyers Claim Three ArrowsCapital, despite the default, continued to trade cryptocurrencies instead of responding to lenders' margin calls. Experts suspect that on June 14, the fund transferred $31 million in USDC stablecoins and $900,000 to Tai Ping Shan, a company located in the Cayman Islands and owned by a partner of the co-founders named Kelly Kaili Chen.

TAC owes approximately 27 crypto companies $3.5 billion. The largest creditor is the crypto brokerage company Genesis, which lent the fund 2.3 billion. After Three Arrows Capital was unable to fulfill its obligations, Genesis sold the collateral and insured its losses.

Recently, a New York federal court froze the remaining assets of cryptocurrency hedge fund Three Arrows Capital after the company filed for emergency bankruptcy.