Three Arrows Capital (3AC) founders Kyle Davies and Su Zhu, have been ordered to appear in court in the British Virgin Islands on May 22 as part of the liquidation proceedings for the collapsed crypto hedge fund. The order states that the 3AC founders will be found in contempt of court if they fail to reply to the order.
According to reports, Davies and Zhu must provide liquidators with all documents relevant to the firms’ bankruptcy by April 14. Please meet this deadline to avoid the examination being moved to April 27 and last 30 minutes rather than the two hours scheduled for May.
Three Arrows Capital collapsed in June 2022 after the depressed crypto market exposed the firm’s long-only trading strategy. The crypto hedge fund estimated its assets to stand at around $1 billion compared to liabilities of $3 billion. The collapse was one of the flashpoints at the onset of crypto winter, bringing about similar failures from multiple other crypto firms.
As a result of the Three Arrows Capital collapse, companies with 3AC exposure, such as Voyager Digital, Celsius Network, and Genesis Asia Pacific, subsequently filed for bankruptcy protection. The liquidation proceedings are expected to shed more light on the circumstances that led to the crypto hedge fund’s collapse and its impact on other companies.
The collapse of Three Arrows Capital has raised questions about the risks associated with long-only trading strategies in the crypto market. It has also highlighted the importance of effective risk management practices in the crypto industry.
Industry participants and observers will closely watch the court hearing in May, which could have far-reaching implications for the crypto industry. It remains to be seen what new information will emerge from the liquidation proceedings and its impact on the broader crypto market.
