World-leading, now bankrupt, crypto hedge fund, Three Arrows Capital lined up with insolvency cases, creditors, and crypto firms liquidating amidst the crypto market crash. According to CNBC, the founders of 3AC, Zhu Su and Kyle Davies were reported physically missing by the creditors.

Three Arrows Capital was once a well-known crypto hedge fund that invested millions of dollars in almost every crypto startup in hopes to develop the Web3 space and become a conglomerate corporation. However, a crypto crash was all it took to break apart and completely dissolve a perfectly working hedge fund with $1B assets within two months.
3AC had a lot of hope attached to Terra’s ecosystem. When LUNA collapsed, the company reported a $200M loss, which eventually led to insolvency and liquidation rumors in the crypto community.
Despite the co-founder, Zhu Su’s claim that they were recovering from the losses, 3AC fell and many crypto firms like FTX, Deribit, and BitMEX liquidated from the hedge fund, claiming they haven’t received promised investment amounts. Finally, on July 1, the news broke that 3AC had filed for Chapter 15 Bankruptcy protection from U.S. creditors in the Southern District of New York.
At the same time, Voyager, a crypto lending firm, filed for bankruptcy protection since 3AC failed to return the borrowed $620M funds. Similarly, many crypto firms have filed for liquidation making it a more serious case than it ever was.

3AC drowns in the bankruptcy case
3AC seems to be having a hard time keeping up with its creditors. The crypto hedge fund filed for bankruptcy protection. However, no progress has been made as of now regarding the case.
Three Arrows Capital has been borrowing funds from various companies and turning them into capital for investment in crypto startups. This strategy worked wonders as many firms thrived with the investment money for the development of the Web3 space.
When the Terra crash happened, the crypto hedge fund couldn’t contain its reserves as it had invested a lot of money in its ecosystem. Months later, another crash happened, and 3AC was unable to hold up causing a collective breakdown in the DeFi and Web3 industry.
This angered the creditors a great deal. According to the court’s report, the founders of 3AC hadn’t even begun negotiations with the creditors “in any meaningful manner.” The founders seem to be running around circles to drag the issue amidst the bankruptcy filing.
Have 3AC Founders gone missing?
According to CNBC, the creditors reported that the founders are physically missing from their offices causing a suspicion that Zhu Su and Kyle Davies might have abandoned the company.
3AC is supposed to hear the case on Tuesday to start the liquidation process but the founders have yet to show their faces in public. However, the founders’ representative lawyer claimed that they have been receiving death threats from the creditors so they relocated to an unknown place.
Friday’s court filing explained that the founders held a Zoom Call to discuss how they will proceed to preserve their assets and deal with the case. Both founders refused to talk and had their videos off during the whole session with only lawyers talking. This caused suspicion and none of the founders might’ve attended at all.
Zhu Su breaks silence on Twitter
After a month-long update, Zhu Su came on Twitter with a post screenshot of the interaction between Russell Crumpler from Teneo and 3AC Founders’ representative Christopher Anand Daniel.
Teneo is a global advisory firm hired to help 3AC manage its remaining assets and recover from the liquidation. According to Russell, the Zoom meeting was highly suspicious and the company also refused to give them access to files and data stored in their main office in Singapore.
The court filing on Friday reported that they haven’t received the permission. Russell reported that the creditors who went to 3AC’s Singapore office found the place to be empty with only a few computer screens working. Following the court filings, Russell concluded that there is a huge risk that the founders might run away.
“That risk is heightened because a substantial portion of the Debtor’s assets are cash and digital assets, such as cryptocurrencies and non-fungible tokens, that are readily transferrable,” He said.
This suspicion comes when a crypto wallet owned by 3AC were transferred to another wallet and the founders might be looking for ways to preserve their remaining reserves without falling under the radar of the creditors.
However, Zhu Su came on Twitter claiming, “Sadly, our good faith to cooperate with the Liquidators was met with baiting…”
The representative lawyer, Daniel, of the 3AC founders said that Zhu Su and Kyle Davies are facing pressure from the Monetary Authority of Singapore and this explains why they haven’t physically appeared in public and in front of the creditors.
The lawyer also explained that his clients will not cooperate with Teneo’s agents for the time being. He said, “Depending on your response, we will let you know when our clients can reasonably be expected to speak with you.”
Final words
the 3AC bankruptcy case doesn’t seem to be doing so well. The founders refuse to show themselves, which makes it even more suspicious. Although the reasons given by their lawyer seem arguable, the creditors are still pushing the authorities to take action against the crypto hedge fund before they go anonymous like many others.
However, due to the lack of proper regulations and defined laws, this case is most likely to get more complicated than ever. As 3AC readies itself for the bankruptcy hearing, many ask the question, “how will 3AC founders satisfy their creditors?” “Will they ever show themselves in public?” and “how will 3AC recover from its liquidation amidst the loss of assets?”
The court is yet to give any decisive statement on the case.