Teneo, the firm overseeing the liquidation of crypto hedge fund Three Arrows Capital (3AC), has frozen approximately $1.4 billion worth of assets belonging to 3AC co-founders.
Teneo, the firm overseeing the liquidation of crypto hedge fund Three Arrows Capital (3AC), has frozen approximately $1.4 billion worth of assets belonging to 3AC co-founders Su Zhu, Kyle Davies, and Davies' wife, Kelly Chen. The freezing order aims to hold the founders responsible for causing 3AC's position to deteriorate by an amount equivalent to the value of the frozen assets.
Teneo has been tasked with liquidating 3AC's assets to repay its creditors $3.5 billion after the hedge fund was ordered to liquidate in June 2022. The firm has described its efforts to obtain cooperation from Zhu and Davies as a "long, intensive effort." Teneo has repeatedly requested a judge to order the co-founders to cooperate, alleging that they were "withholding information." U.S. authorities have also pursued the co-founders, with Davies renouncing his American citizenship in 2017 to avoid answering to U.S. courts.
In June, Teneo demanded a similar amount of money from the founders. Bloomberg reported that Teneo had met with 3AC's creditors and learned of allegations that the co-founders continued taking on leverage in May and June 2022 despite the firm being insolvent.
Teneo has secured some company assets, including $35.6 million in cash, a $30 million yacht, and some NFTs. However, these assets fall short of the $3.5 billion missing from Three Arrows Capital's balance sheet.
Zhu and Davies went into hiding shortly after 3AC's collapse, citing death threats. Zhu was arrested in Singapore’s Changi Airport in September, but is reportedly set to be released following interrogation by the local court.
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