Report: British Virgin Islands Court Freezes 3AC Assets Worth Over $1 Billion

A court in the British Virgin Islands has issued an order to freeze assets worth over $1 billion belonging to the founders of the defunct crypto hedge fund Three Arrows Capital. The worldwide freeze order also bars Kelly Chen, the wife of Kyle Davies, from transferring or selling the co-founders’ digital assets.

Freeze Order Also Applies to Kyle Davies’ Wife

Digital assets worth over $1 billion belonging to the founders of the now-defunct crypto hedge fund Three Arrows Capital (3AC) have been frozen by a court in the British Virgin Islands. According to the firm’s liquidator Teneo, the court’s decision bars co-founders Su Zhu and Kyle Davies, as well as the latter’s wife Kelly Chen, from transferring or liquidating the digital assets.

The liquidator estimates the frozen assets to be worth $1.14 billion while creditors are owed more than $3 billion. Since the collapse of their firm, 3AC co-founders have been accused of attempting to frustrate the liquidation process by firstly filing for Chapter 15 bankruptcy protection in July 2022. The objective of the filing was reportedly to block the liquidator and creditors from seizing the firm’s assets in the United States.

The co-founders have also faced allegations of evading subpoenas and in June this year, the liquidator asked the court to impose a fine of $10,000 per day on the non-complying Davies. Remarking on the British Virgin Islands court freeze order, the liquidator said:

“The worldwide freezing order has been sought in connection with claims that are being pursued by the liquidators that allege, amongst other things, that the founders should be held responsible for causing 3AC’s position to deteriorate by an amount that is equivalent to the value of the freezing orders sought.”

After the collapse of 3AC, both Zhu and Davies went into hiding but the former’s luck ran out in September when he was arrested in Singapore and was subsequently handed a four-month jail sentence.

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