Shocker: Three Arrows Capital Founders Bought $50M Yacht Before Going Bankrupt With Borrowed Money

– Advertisement –

Follow-Us-On-Google-News

 

3AC is in trouble as investor exposes their yacht purchase that was paid with investor funds.

The recent collapse of Terra Luna and UST put so many investors and crypto firms in misery. Still, the expose`s being made now show that some of the firms may have grabbed the opportunity to defraud investors.

A case in point is the latest information about the two founders of Three Arrows Capital (3AC) – Kyle Davies and Su Zhu. Apparently, the two put a $50 million down payment on a super yacht in Singapore right before the firm went under.

$50 Million Down Payment Paid With Investors’ Funds

Speculations into the funds used indicate that the $50 million was sourced from borrowed funds. The new information was shared in documents held by the Singapore High Court. Basically, the 3AC founders used investor funds for purposes other than what it was intended for, a move that amounts to misappropriation of funds and outright fraud.

A short while later, 3AC filed for bankruptcy after the collapse of Terra. The firm had invested around $200 in the Terra coins and UST and couldn’t pay investors after the cryptos collapsed.

3AC Owes $302 Million To Charles McGarraugh

News of the apparent misappropriation of investor funds was broken in a remark shared to the court by one of the 3AC creditors, Charles McGarraugh. Charles works at Blockchain.com as the chief strategy officer. Apparently, 3AC owes him funds to the tune of $302 million.

Writing to the Singapore High Court, he remarked,

“For example, upon information and belief I understand that Messrs. Zhu and Davies reportedly made a down payment on a USD $50 million yacht. It is also my understanding that Mr. Davies intends this yacht to be larger than any yacht owned even by Singapore’s richest billionaires.”

Charles also intimated that besides the $50 million down payment used for the yacht, 3AC’s Zhu used $35 million to purchase a home in Singapore back in December.

Firm Owes $3.5 Billion To 27 Creditors.

At the height of its success as a hedge fund, 3AC controlled around $10 billion worth of assets. Things went south after the collapse of Terra and the preceding crypto winter that wiped out billions from the market. The firm now owes around $3.5 billion to investors, with only one investor named Genesis holding a $2.36 billion stake in the said debt. The collapse of 3AC also caused a ripple effect that led to the collapse of Voyager. Three Arrows Capital owes Voyager $650 million – which it failed to pay.

– Advertisement –

Source: https://thecryptobasic.com/2022/07/19/shocker-three-arrows-capital-founders-bought-50m-yacht-before-going-bankrupt-with-borrowed-money/?utm_source=rss&utm_medium=rss&utm_campaign=shocker-three-arrows-capital-founders-bought-50m-yacht-before-going-bankrupt-with-borrowed-money