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Liquidators of crypto hedge fund Three Arrows Capital say they can’t find founders

Where on earth are Su Zhu and Kyle Davies? The founders of cryptocurrency hedge fund Three Arrows Capital (3AC) are nowhere to be found, according to officials tasked with liquidating the bankrupt company (via Reuters). Zhu and Davies’ whereabouts are currently unknown, according to a court document filed Friday, and liquidators say they have received “no meaningful cooperation” from the two.

Singapore-based 3AC filed for Chapter 15 bankruptcy earlier this month, a move aimed at protecting foreign company assets from US creditors. News of the bankruptcy filing emerged after 3AC defaulted on a $670 million loan provided by crypto broker Voyager Digital, which has since also filed for bankruptcy. 3AC also reportedly failed to repay $270 million to crypto exchange Blockchain.com. A British Virgin Islands court appointed management company Teneo to oversee the liquidation of 3AC.

Russell Crumpler and Christopher Farmer, two senior directors at Teneo, claim they were unable to reach Zhu and Davies. In the court filings, Crumpler and Farmer allege they joined a Zoom call with “people who identified themselves as ‘Su Zhu’ and ‘Kyle’,” but “their video was off and they were silent the whole time, with no one of them anyway spoke questions that are put directly to them.”

During the Zoom call, the two founders instead communicated through representatives from a Singapore-based law firm. Farmer claims he even tried to locate Zhu and Davies at 3AC headquarters in Singapore – only to find a locked door and a pile of unopened mail. The filing notes Zhu may be attempting to sell his $35 million Singapore mansion, citing various rumours.

Crumpler and Farmer claim there is an “impending risk” that the duo may attempt to move the company’s remaining funds elsewhere. “Here, that risk is heightened because a significant portion of the debtor’s assets consist of cash and digital assets, such as cryptocurrencies and non-fungible tokens, which are easily transferrable,” the filing reads. “The diplomatic missions [Teneo]the debtor [3AC]and his creditors as a whole would be irreparably harmed if the debtor’s assets were disposed of during the provisional period.”

The sudden disappearance of Davies and Zhu is not all that unusual in the crypto world. Users struggled to sue Binance last year after the exchange halted trading while Bitcoin plummeted in value… because they couldn’t really figure it out how to complain. And in another strange case, Gerald Cotten, CEO of crypto exchange QuadrigaCX, died and his clients’ funds, estimated at around $250 million, disappeared. (Mysteriously, former Quadriga executive Michael Patryn founded the Wonderland DeFi protocol.)

As noted by Reutersthe court has scheduled an emergency hearing on Tuesday, July 12 to address 3AC’s situation. The collapse of major cryptocurrency firms like 3AC has caused a lot of damage to the crypto market that probably hasn’t been fully recognized yet. Crypto lending firms Babel Finance and Celcius were also hit by the market turmoil as both firms froze transactions amid a “crypto winter.”