Read the Court Filing: 3AC Founders Refuse to Show on Zoom

Kyle Davies Su Zhu — *Three Arrows Capital Co-Founders Kyle Davies and Su Zhu*

British Virgin Islands-based liquidators of Three Arrows Capital (3AC) told a court in an emergency motion they were alarmed by the lack of information about the whereabouts of the company’s “uncooperative” founders, Zhu Su and Kyle Davies, noting they had refused to appear on camera or answer questions during judicial proceedings.

Attorneys Russell Crumpler and Christopher Farmer asked the Bankruptcy Court for the Southern District of New York in their Friday motion to grant them emergency discovery in light of reports that Zhu was “attempting to sell a property in Singapore with a potential value in the tens of millions of dollars.”

“The physical whereabouts of the debtor’s founders, Zhu Su and Kyle Livingstone Davies, are currently unknown, and while a lawyer in Singapore purporting to represent the founders recently approached the foreign representatives, the founders have not yet begun to cooperate with the foreign representatives in any meaningful manner,” the attorneys said. The foreign representatives’ efforts are continuing in earnest but have been frustrated by this lack of cooperation to date.”

A court in the Virgin Islands ordered the Singapore-based 3AC into bankruptcy in June. The investment firm, which was worth billions at the crypto market’s height last year, became insolvent last month after making a number of failed bets on the price of bitcoin. It filed for bankruptcy in New York the subsequent week in an effort to regain some control over the liquidation of its assets.

However, liquidators said Friday that “while persons identifying themselves as ‘Zhu Su’ and ‘Kyle’ were present” on an “introductory” Zoom call in court, “their video was turned off and they were on mute at all times with neither of them speaking despite questions being posed to them directly.

While persons identifying themselves as “Su Zhu” and “Kyle” were present on the Zoom call, their video was turned off and they were on mute at all times with neither of them speaking pic.twitter.com/Ro427D9LXt

— db (@tier10k) July 11, 2022

“Absent provisional relief, there is an actual and imminent risk that the debtor’s assets may be transferred or otherwise disposed of by parties other than the court-appointed foreign representatives to the detriment of the debtor, its creditors, and all other interested parties,” they added. “Here, that risk is heightened because a substantial portion of the debtor’s assets are comprised of cash and digital assets, such as cryptocurrencies and non-fungible tokens, that are readily transferrable.”

They voiced a similar complaint earlier in the month, telling the court Davies’ and Zhu’s whereabouts were “unknown,” though they were “rumored to have left Singapore.” However, they had not previously disclosed the details about the Zoom call.

3AC owes hundreds of millions to a number of creditors, including roughly $650 million to the Toronto-based exchange Voyager Digital, which filed for bankruptcy on Tuesday. It owes another $270 million to Luxembourg-based exchange Blockchain.com, one of the creditors that filed for 3AC’s liquidation in the Virgin Islands, along with about $80 million to Panama-based exchange Deribit. It borrowed 1,300 bitcoin and 15,000 Ethereum from that company in March 2020, worth roughly $40 million as of Sunday.

You can read Friday’s court filing embedded above.