Three Arrows Capital unravels as creditor list emerges

Three Arrows Capital (3AC) liquidators have applied to a High Court in Singapore to deny any claim made by the hedge fund or access to its headquarters, court filings showed.

The liquidators said they need the court to protect the hedge fund assets in Singapore, given the number of legal proceedings that might come against the company in the future.

The application filed on July 9 pointed out that 3AC’s trading wallets and cold wallets information might be in the Singapore office, and they want to access it.

By doing this, the liquidators want the Singapore court to apply the judgment of the British Virgin Island court in the country.

Genesis revealed to be the largest creditor

The over 1000-page court document showed that the hedge fund owed 32 companies a total of $3.5 billion, and its largest creditor was Genesis, the crypto brokerage arm of Digital Currency Group Inc.

Per Wu Blockchain, Genesis Asia Pacific gave 3AC a $2.36 billion loan collateralized with 3AC’s GBTC shares, Grayscale Ethereum Trust shares, Avalanche (AVAX), and NEAR.

1/ As part of our goal in providing transparency to the market, I wanted to share the latest update at @GenesisTrading.

— Michael Moro (@michaelmoro) July 6, 2022

Michael Moro, Genesis CEO, said the firm had mitigated its losses to 3AC.

Crypto lending companies, Voyager and Celsius, were also revealed to be part of 3AC creditors.

According to the court filing, Voyager’s almost $1 billion loan is now worth $600 million. Celsius exposure to 3AC is around $70 million USDC.

Voyager and Celsius recently filed for a Chapter 11 bankruptcy claim of their own too.

Algorand is a 3AC creditor too

Algorand (ALGO) Foundation also revealed that it was one of 3AC’s creditors.

Last September, the Algorand Foundation entered a one-off OTC trade with 3AC. We have reason to believe 3AC violated the associated lockup terms and as such are seeking remuneration per the terms of the agreement….

— Algorand Foundation (@AlgoFoundation) July 18, 2022

Other major debtors include DRB Panama Inc, which lent 15,000 ETH and 1,300 BTC, FalconX with $65 million, and CoinList seeking to recover $35 million in USDC.

However, most companies claim they are not affected by 3AC’s default.

3AC founders also filed against the company

A tweet from DrSoldmanGachs showed that 3AC founder Su Zhu filed a $5 million claim against the embattled hedge fund. Cofounder Kyle Davies’ wife, Kelli Kali Chen, reportedly filed a $65.7 million claim against the firm.

Su Zhu is claiming $5m, ThreeAC Limited is claiming $25m, and Chen Kaili Kelly (Kyle’s wife) is claiming $66m. Interestingly, these claims may be considered as quasi-equity and be subordinated to creditors resulting in them rightfully getting 0

— Soldman Gachs ⌐◨-◨ (@DrSoldmanGachs) July 19, 2022

Meanwhile, reports revealed that 3AC’s investment managing arm ThreeAC Limited made a $25 million claim against the parent company.

DrSoldmanGachs revealed that a creditor committee had been set up. The biggest creditors like the Digital Currency Group, Voyager Digital, Blockchain Access UK Ltd, Matrix Port Technologies, and CoinList Lend are on the committee.