YEREVAN (CoinChapter.com) — Su Zhu, the co-founder of crypto hedge fund Three Arrows Capital (3AC), has slammed its liquidators on Twitter.
Breaking his almost month-long silence, Zhu shared screenshots of two emails from his legal team Advocatus Law addressed to the liquidators. He accused them of dishonesty and breach of trust.
The tweet comes after reports alleged Zhu and 3AC co-founder Kyle Davies had refused to cooperate with liquidators in bankruptcy proceedings.
In one of the emails addressed to liquidator Russell Crumpler of Teneo, Zhu’s legal team alleges their clients were tricked into good faith negotiations. However, unbeknownst to them, they had already filed a case against the hedge fund in the US.
“It now appears clear why your Singapore solicitors were keen to ask if the discussions were a ‘without prejudice’ basis. It was to use the discussions in Court filings without notice to our clients,”
Advocatus wrote.
The email also clarified that 3AC had a “desire to work reasonably” with the liquidators to repay its obligations.
Last month, Zhu also tweeted his readiness to cooperate with authorities.
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Three Arrows Capital faced an insolvency crisis last month and defaulted on $1.5 billion in loans from crypto lenders Voyager Digital and BlockFi. It subsequently filed for bankruptcy on July 1.
As the court ordered the fund to liquidate assets, the firm’s executives began ghosting creditors and liquidators. They also failed to reveal themselves in a zoom call meeting with Teneo.
The whereabouts of Zhu and his Co-founder friend remain unknown. According to a recent court filing, their offices in Singapore are also closed.
“While a lawyer in Singapore purporting to represent the Founders recently approached the Foreign Representatives, the Founders have not yet begun to cooperate with the Foreign Representatives in any meaningful manner,”
the court document from July 8 alleged
In the letter, Zhu’s lawyers make clear to the liquidators that the duo will not attend a scheduled call with them. In addition, they made clear that their agreement to speak with Teneo executives depends on their response to the shared email.
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Frustrated by the conduct of Zhu and Davies, the liquidators requested and received an emergency court hearing against 3AC.
In a major blow to Zhu, the US court gave liquidators permission to issue subpoenas and lay claim to Three Arrows Capital.
Adam Goldberg, a lawyer for the liquidator, argued that 3AC’s unwillingness to cooperate provided enough ground for an order.
US Bankruptcy Judge Martin Glenn, seeing merit in the plaintiff’s arguments, ruled in their favor. The order will help prevent 3AC from selling its assets.
“A key part of this order is to put the world on notice that it is the liquidators that are controlling the debtor’s assets at this stage,” .
the judge said
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The second email, which Zhu shared on Twitter, caught the communities attention.
His legal team has accused the liquidators of failing to claim tokens to be issued by StarkWare. According to the legal team’s email, the deadline to lay claim was July 5.
The failure has allegedly caused “the Company to lose substantial value.”
3AC had participated in StarkWare’s $75 million Series B funding round in March 2021.
The Israel-based company is reportedly working on Starknet, an Ethereum (ETH) layer-2 scaling solution. However, unlike other players in the space, it has not launched a native crypto token.
Investors have long speculated if the project will launch a StarkWare token. After Su Zhu shared the emails, people took it as a confirmation about the launch of the token.
In early 2022, 3AC had $10 billion in assets under management. As of April, it held $3 billion in cryptocurrencies.
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