Unconventional actions are being taken by the liquidators of the collapsed crypto hedge firm Three Arrows Capital to compel the fund’s founders into complying with the law’s due process.
After a British Virgin Islands court apparently placed the company into liquidation at the end of June, the Singapore-based firm filed for Chapter 15 bankruptcy in a federal bankruptcy court in the Southern District of New York in July.
Now, based on court documents, as traditional methods of service have failed, the court-appointed liquidators from the consultancy firm Teneo and its attorneys have asked a US judge to allow them to serve subpoenas on 3AC founders Su Zhu and Kyle Davies via their social media accounts and email addresses, Forkast and other news outlets reported, Tuesday.
This last-resort like move comes in light of the frustrating failure of attempts to have them cooperate in undertakings that will resolve the matter of giving compensation to investors who lost a lot of money with Three Arrows Capital.
Adding to the frustrations was the adamant claim of the legal counsel of the duo that the limited information they provided including “incomplete list of assets and selective disclosures regarding the means to access digital assets electronically” was all they had which pertained to 3AC.
As access information was not disclosed, the piece of intel was practically useless.
Image: Blockchain News Three Arrows Founders Pulling Moves Ala Do Kwon?
Zhu and Davies, failing to show proper cooperation with liquidators, remind the public of now Red-listed Terraform Labs Co-founder Do Kwon.
Following the infamous Terra Crash this year, Kwon ended up being the subject of a warrant of arrest released on September 17, 2022 after reports of him fleeing to Singapore surfaced.
Prosecutors from South Korea, still clueless to the whereabouts of the CEO, sought assistance from Interpol, asking Kwon to be put in Red Notice which will allow his arrest while awaiting extradition or other legal proceedings.
Now left with few options to force Kwon to reveal his current location, South Korean officials made the decision to revoke his passport and deny his applications for a new one.
This recent move of South Korean authorities is somewhat akin to the idea of sending subpoenas for the Three Arrows Capital through Twitter and email which is hoped to flush them out of wherever they are “hiding.”
U.S. Regulators Also Want Answers
The bankruptcy of Three Arrows Capital was initially thought to be induced by the crypto bear market in May.
But as additional information came out, it appears the collapse was self-inflicted, brought about by unchecked decision making process.
The U.S. Securities and Exchange Commission (SEC) and U.S. Commodities and Futures Trading Commission are also looking into the case of Three Arrows Capital.
The two regulating body well known to the crypto space are under the impression that 3AC might have misled investors by not registering with them and falsifying their balance sheets.
But with Su and Davies still MIA, answers being sought will have to wait as well as the plans for asset liquidation to help compensate investors who lost a lot of their money.