Where in the world are the 3AC founders? Speculations abound

Where in the world are the 3AC founders? Speculations abound

According to reports, Three Arrows Capital’s creators are still missing. Court-appointed liquidators visited the Singapore headquarters of the firm recently and found only a locked door, along with a stack of old mail.

3AC, a Singapore-based cryptocurrency firm, has fallen under bear pressure and is now facing liquidity problems due to the recent market sell-off.

A court in the British Virgin Islands where 3AC had registered moved its registration in June. Teneo was appointed by the court to liquidate 3AC assets.

Russell Crumpler, a senior Teneo managing director, and Christopher Farmer, a Christopher Farmer court representative, informed the court that Zhu Su, and Kyle Davies, co-founders, of 3AC, are still missing.

Recently, Teneo received approval from a Singapore court for the petition against 3AC that was issued in British Virgin Islands. This will allow Teneo to legally request access to 3AC’s financial records in Singapore.

Cointelegraph spoke with David Lesperance who is a lawyer with more than 30 years’ experience as a taxation or citizenship advisor. He said that he believes the founders took advantage of a backup plan to go underground. When regulators come knocking, pioneer founders in unregulated areas like crypto and gaming need to keep their power balance.

He said that it was best to keep parity when trying to negotiate to change business practices to meet the new standard. This can be done from a distance where it is more difficult for regulators to bully. Lesperance says this allows company lawyers to negotiate on an equal playing field with regulators, liquidators, and courts.

Lesperance explains further that Elliot Spitzer, the former New York Attorney General, was a master at nabbing CEOs to make them do the “perp walk” in the 1990s. Spitzer would then call the board to offer them a plea deal hours before the opening bell of the stock market. The boards were in a weak position and would negotiate to agree to the charges against Spitzer. According to Lesperance, Spitzer had no chance of winning the trial. This was only to save company shares.

Lesperance stated that “in the time online gambling and sports betting sites were becoming popular, I had many founder clients who managed to stay out of the clutches overzealous American attorneys while their corporate lawyers adjusted the businesses to the new U.S. regulatory regulations that had been pushed through their brick-and mortar Vegas competitors.”

“These founders continued legal living and operating in more friendly jurisdictions throughout this negotiation period. Their competitors, who were taken into the U.S. government’s hands during this period, saw the collapse of their businesses and were then bought by my clients for pennies on a dollar.”

He said that 3AC’s founders had fled Singapore and that investors are now more suspicious of the company as an illegal operation. This is not the only point. 3AC boasted once that it managed around $10 billion in assets. Some believe this was a cover-up to the founders’ escape plan.

According to Zhu’s verified twitter account, Lesperance claims that Three Arrows founders provided a spreadsheet containing details of the company assets to liquidators.

Our goodwill to cooperate with Liquidators was met by baiting. We hope that StarkWare token warrants were issued in good faith. pic.twitter.com/CF73xI8r6n
— Zhu Su (@zhusu) July 12, 2022

According to the tweet, the 3AC co-founders are still working to locate details about other assets and are dissatisfied with the liquidators’ behavior. In an effort to find the founders, liquidators from the hedge fund traveled to Three Arrows’ Singapore office in late June.

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It appeared to be dormant. The door was locked, the computers were inactive, and mail was hidden under the door. According to court documents, liquidators spoke via videoconference with Davies and Zhu lawyers last week but didn’t speak directly to founders. “It’s worth noting, at this stage, the liquidation has been a civil matter. Neither founder has been charged with a criminal offense.”

According to Lesperance, rumors suggest that they may be heading to Dubai or are already there.

Finance Magnates reports that the 3AC founders planned to “move business to Dubai” in the past. Zhu said they would “have to go there soon to evaluate whether we move as planned or if there are other options.”

Zhu’s twitter account also shows that he is currently in the UAE. His last tweet was July 12. Davies’ tweet location still shows Singapore.

Are co-founders able to hide in Dubai?

According to Lesperance, Dubai is a popular choice for crypto entrepreneurs. Binance founder Changpeng Zhao is an example. He said that it is quite simple to get visas for private or commercial planes which allow you to enter Dubai.

Lesperance says that it is not a safe place to hide if criminal charges are ever brought against you. Hushpuppi, a Nigerian fraudster, discovered this the hard way after he was taken into custody by Dubai police and flown to the United States.

It is important to note that the UAE has extradition agreements with 37 countries. Many of these countries are likely to be watching Three Arrows Capital’s actions. According to Bloomberg data, the UAE has extradition treaties signed by the United States, Canada, Hong Kong, Singapore, and the United Kingdom.

Lesperance said that if the rumors are true, and 3AC founders have fled to Dubai, then they could be in for a shock if criminal charges are ever filed against them.

What should they do other than move to Dubai?

“Both Kyle & Zhu are American citizens. It is unknown if they have obtained any other citizenship, such Singaporean. According to the lawyer, they are at risk if they travel only on U.S passports.

It is their passport, not theirs. It is actually the property of the United States. According to Lesperance, this allows them to use the passport until it is no longer allowed.

He says this is because they wouldn’t have a travel document to allow them to enter third countries. It is difficult to live without a passport. It may also prevent them from applying for a residence permit or opening bank accounts.

“If they are smart, they’ll get a lawyer and fight any American charges. They might be able to negotiate a deal with the United States that would include some type of house arrest, or other alternatives to prison if they are found guilty. Lesperance states that if they are convicted, it is very probable that they will never be seen again.

Are they eligible to apply for citizenship through investment?

According to the lawyer, Zhu and Davies can apply for citizenship by investments (CBI) in a variety of countries including Dominica and St. Lucia.

Most CBI programs require that the applicant make a substantial financial investment in the country. This is usually in the form a real-estate purchase or a government bond. They are then granted citizenship and a passport that allows them to travel freely to other countries and live and work there.

Although CBI programs might offer Zhu and Davies a way to get second citizenship and a passport, it’s important to remember that they could still be extradited to the U.S. in the event of criminal charges being brought against them.

Lesperance also stated that countries with citizenship by investment programs are subject to screening and due diligence processes, contrary to popular belief. Given the public attention surrounding these gentlemen, and the possibility that they could face criminal charges, there is currently no citizenship program by investment program that would grant them a passport.

Another thing to keep in mind is that this citizenship cannot be granted instantly. Lesperance states that they can take up to four months to process and require a valid passport. They would be “trapped” if the U.S. cancelled their passports.

The liquidation is essentially destroying Kyle and Zhu’s fiscal house. The time is now to get “fire insurance” for a second passport. If they are ever charged with criminal “arson”, (i.e. fraud), they will have to face justice. The lawyer explained to Cointelegraph that they would be doing this from a prison cell without a second passport.

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3AC was once a crypto fund that managed approximately $10 billion. Poor Terra investment led investors to demand their money back. 3AC was forced to file for Chapter 15 bankruptcy protection, and its founders fled a swarm regulators and creditors.

Three Arrows Capital (3ac), which had made a series large directional trades (GBTC and LUNA, stETH), and borrowed from over 20 large institutions, went bankrupt. After the founders fled, the loan defaults led to widespread crypto contagion.
— Jack Niewold (@JackNiewold) July 18, 2022

According to a court filing made public by Genesis Global Trading last month, the crypto hedge fund owes $3.5B to 27 companies.

3AC’s cautionary tale is not necessarily a warning sign for the entire crypto industry. It is, instead, a reminder of the fact that even experienced and well-funded investors can make mistakes.

com. You should do your research before making any investment or trading decision.

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