3AC Co-Founder Concerned About Facing Prison Time (Report)
Su Zhu, one of the founders of troubled cryptocurrency hedge fund Three Arrows Capital (3AC), is reportedly worried about facing harsh legal penalties. Specifically, the Singaporean said he, Kyle Davis and other executives could face “fines and jail terms” for being in charge of the troubled company.
In late June, a British Virgin Islands court ordered 3AC to be liquidated. Soon after, a number of crypto firms confirmed contacts with the defunct company, while its executives Su Zhu and Kyle Davies were rumored to have fled Singapore.
Knocking on prison sentence
According to a recent Bloomberg Report, Zhu handed in his affidavit in person a few weeks ago in Thailand. In it, he claimed he feared “the serious consequences that could result from the exercise of the liquidator’s broad powers”. The executive feared that he and some of the organization’s other managers were at high risk of going to jail.
Teneo, a British Virgin Islands court-appointed consultancy for the liquidation of 3AC’s assets, “strongly disagrees” with Zhu’s argument that their lawyers overstepped their authority.
“We remain optimistic that these parties will provide full records and access to all relevant information to enable us to fully discharge our responsibilities in the interests of 3AC’s creditors,” the company statement added.
Another group of lawyers recently accused Su Zhu and Kyle Davies of not cooperating despite their companies causing significant harm to users. Furthermore, they claim that the two have left Singapore and their whereabouts are unknown:
“The foreign representative understands and believes that while the debtor has carried on certain businesses in Singapore, the current location of Mr Davis and Mr Chu remains unknown. It is rumoured that they have left Singapore.”
The collapse of 3AC is seen as a major blow to the industry, as some of its high-profile creditors include BlockchainCom and Voyager Digital.Some sources estimate hedge funds have About $3.5 billion to 27 companies.
How Zhu and Davis explained the crash
After a moment of silence, Zhu and Davis finally spoke about their company’s problems and what led to its decline a few weeks ago. They argue that a combination of one-way betting and a simultaneous collapse of easy lending facilities started the downtrend, while the collapse in the cryptocurrency market later exacerbated the free fall.
Zhu believes that the “nail in the coffin” for Three Arrows Capital is Bitcoin’s fall from over $30,000 to below $20,000. Contrary to the allegations against them, the executive said he and his partners did everything possible to prevent the disaster:
“People might call us stupid. They might call us stupid or delusional. And, I admit. Maybe. But they’ll, you know, say I ran out of money in the final stretch and I actually put back more a lot of personal funds.”
Subsequently, Zhu did not confirm whether he is currently living in Dubai rumors. However, he assured that he and Davis have been cooperating with the relevant authorities in Singapore.
Binance Free $100 (Exclusive): Use this link to sign up and get $100 for free and a 10% fee discount for your first month on Binance Futures (Terms).
PrimeXBT Special Offer: Use this link to sign up and enter code POTATO50 to get a deposit of up to $7,000.