A United States court granted liquidators permission for them to subpoena three founders of cryptocurrency investment firm Three Arrows Capital (3AC) including Su Zhu, Kyle Davies.
Law360 reported that on Tuesday, U.S. Bankruptcy Judge Martin Glenn granted the subpoenas. He was informed by counsel for liquidators that the founders were not known and that there were concerns they might be selling off assets worth tens to millions.
Adam Goldberg, the counsel, stated that he did not know where Zhu and Davies were at the moment. He also claimed that the two men have not cooperated with the liquidators in a meaningful way.
Goldberg expressed concern that 3AC might be selling assets, pointing out media reports that Zhu was selling a Singapore property valued at “tens to millions”.
The job of a liquidator is to determine the value and then sell assets to pay unpaid debts. If 3AC does not have jurisdiction, liquidators might have difficulty collecting crypto assets.
Martin Glenn, the Presiding Judge, acknowledged that the extraction of crypto funds from the firm poses “tricky problems” due to the location and security of crypto wallets.
Bloomberg reported that Goldberg asserts that crypto wallets are under U.S. jurisdiction, and that assets are now at his discretion. Goldberg stated,
“A key component of this motion is to notify the world that the liquidators are in control of the debtor’s assets.”
Three Arrows Capital (3AC), a prominent investment firm based in Singapore, was founded in 2012 and boasted assets of over $18 billion as of April. However, it may have lost a substantial portion of that wealth after the May crash of the LUNA token.
3AC defaulted on approximately $1.5 billion of loans from cryptocurrency lenders Voyager Digital, BlockFi.
3AC founders Zhu Davies and Davies, however, have remained radio silent since June 14th. Their location remains a mystery to the general public.
Zhu broke the silence of his week-long silence by posting a tweet condemning liquidators for trying to bait him into buying Starkware tokens.
The layers of 3AC’s alleged dealings were exposed in June. This led to liquidations in British Virgin Islands and financial calamities via various crypto platforms.
Related: Singapore reprimands 3AC because it provided false information
Voyager’s bankruptcy filings and BlockFi’s position in which it could be bought out by FTX.US crypto-exchange are partly due to 3AC’s loan defaults. 3AC filed for Chapter 15 bankruptcy in July 1.