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Rp 150 T Crypto Dealer Lost, What About Investor Funds?

Jakarta, CNBC Indonesia – The fall in crypto prices has put the Three Arrows Capital hedge fund in trouble. In the past, this company managed assets of US$ 10 billion or equivalent to Rp. 150 trillion (assuming Rp. 15,000/US$), now it is filing for bankruptcy.

Now, the two founders of Three Arrows Capital are hiding from angry creditors, who are trying to withdraw some of the funds to cover their losses.

This incident led a federal judge in a New York court to order to freeze the remaining assets of Three Arrows Capital. Judge Martin Glenn granted an emergency motion to freeze the crypto company’s assets.


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In his decision, Martin Glenn ordered that only assigned bankruptcy liquidators have the authority to “transfer, encumber, or otherwise dispose of debtor assets that are within the territorial jurisdiction of the United States,” the ruling said. 7/2022).

As part of the decision, global advisory firm Teneo, tasked with managing the liquidation, was also granted permission to summon Three Arrows co-founders Zhu Su and Kyle Davies, as well as banks, crypto exchanges, and other institutions and companies that do business with the company.

The main concern in the case of Three Arrows, also known as 3AC, is that corporate leaders may siphon off funds prior to formal liquidation. Coindesk reports that Zhu Su wants to sell his property in Singapore for US$35 million, and there are reports of at least one other digital asset transfer of non-fungible tokens (NFT) held by the company.

“An important part of this motion is to let the world know that it is the liquidator who controls the debtor’s assets at this stage,” said Adam Goldberg, a lawyer representing Teneo.

Zhu Su and Kyle Davies did not respond to requests for comment. Their lawyer, Christopher Anand Daniel of Singapore-based Advocatus Law, also did not respond to CNBC International’s request for comment.

Goldberg, of law firm Latham & Watkins, said liquidators were looking for documents such as account statements and digital wallet information.




Foto: Su Zhu, Co-founder Three Arrows Capital (dok Twitter Su Zhu)

The main reason for the aggressive behavior is that Zhu Su and Kyle Davies’ physical whereabouts are “currently unknown,” according to lawyers representing the creditors. The creditors also alleged that liquidators in Singapore found 3AC’s offices empty, except for a few inactive computer screens.

But after nearly a month of absence from Twitter, Zhu Su appeared on Twitter on Tuesday morning, writing that the company’s efforts to cooperate with creditors had been met with “bait.”

From his verified account, Zhu Su shared a screenshot of the email sent by his lawyer to the adviser representing the liquidator. In the message, the lawyer wrote that the founding family “had received threats of physical violence.” He also said Zhu and Davies had “worked under a lot of time pressure,” noting that they “had to ask questions from the Monetary Authority of Singapore in the last week.”

In the email, Daniel, their attorney, said he attached a spreadsheet with details of the company’s assets and said they would provide additional information about the company’s assets “on a rolling basis.”

CNBC asked Daniel for a spreadsheet, but got no response. Goldberg said during the trial that the information provided to his team “was by no means an adequate form of cooperation.”

Nic Carter of Castle Island Ventures, which invests in blockchain-based companies, said the process could eventually take years.

“I will not hold my breath to see the situation resolved,” Carter said. “I would be very concerned about the disposition of the assets and try to dispose of them or perhaps expropriate assets that are owed to creditors, and siphon their funds out of processing for personal use.”

Carter said the case was particularly complex because it involved entities in Dubai, Singapore and elsewhere overseas.

“The level of coordination required to bring the legal process together here is significant,” Carter said.

[Gambas:Video CNBC]

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