Liquidators are reportedly seeking to recover more than a billion dollars from the co-founders of bankrupt crypto hedge fund Three Arrows Capital (3AC).
According to a new Bloomberg report, 3AC co-founders Su Zhu and Kyle Davies racked up some $1.3 billion in losses before the hedge fund collapsed, the sum which the liquidators are now seeking from them.
The report relies on an unnamed source with knowledge of the liquidators’ claims, who says that Zhu and Davies are accused of forcing the firm to take on serious leverage when it was already insolvent and suffering from big losses after the collapse of the Terra (LUNA) ecosystem.
Bloomberg’s requests for comment from the lawyers of the co-founders were not responded to at time of publication.
In July 2022, there were reports about the challenges of the 3AC bankruptcy proceedings, including liquidators accusing the co-founders of a lack of cooperation.
At that time, Zhu was critical of liquidators in a tweet.
“Sadly, our good faith to cooperate with the Liquidators was met with baiting.”
The liquidators are partners at the consulting firm Teneo and were appointed by a British Virgin Islands court last year. Three Arrows creditors are reportedly owed a total of $3.3 billion, which includes the $1.3 billion.
This month, liquidators requested that a New York bankruptcy judge fine Davies $10,000 per day for allegedly not responding to a subpoena for business records, according to the report.
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Featured Image: Shutterstock/Chones
Source: https://dailyhodl.com/2023/06/27/bankrupt-crypto-hedge-fund-three-arrows-capital-pursued-by-liquidators-for-1300000000-report/