The co-founder of Three Arrows Capital has come forward for the first time in a month. He claimed to have been harassed
After almost a month of being out of the public eye, the co-founder of crypto-fund Three Arrows Capital (3AC) is back in touch. On Twitter, he posted screenshots of emails from Advocatus Legal LLP, the law firm representing 3AC in its bankruptcy asset liquidation case, to the liquidators themselves. Meanwhile, lawyers involved in the case had earlier said there were concerns about the disappearance of the company’s top executives. Suu Joo himself believes that a targeted smear campaign has been launched against them. We are giving a more detailed account of the situation.
We note that the situation surrounding one of the once leading cryptocurrency funds is getting worse. In particular, today it became known about the meeting of creditors Three Arrows Capital, which will be held on July 18 and will be held by employees of financial consulting firm Teneo.
To this end, they have also made a website that will collect the necessary information regarding the liquidation of the 3AC crypto fund.
Website for liquidators of Three Arrows Capital fund
It was also revealed yesterday that Three Arrows Capital crypto fund co-founders Soo Joo and Kyle Davies were not planning to take part in a court hearing in New York regarding what is happening with 3AC. And that’s hardly a good sign for the company.
What is going on with Three Arrows Capital?
One of the letters published by Zhu accuses authorised asset liquidators Russell Crumpler and Christopher Farmer of “harassment”. Here is Su’s relevant rejoinder, with which he broke the protracted silence on his part.
Unfortunately, our good intentions in cooperating with the liquidators have been met with attempts at bullying.
Why Zhu presents cooperation with the liquidators as a positive phenomenon is unknown. Obviously, he had no choice but to hide from the investigation and that is not a very good option.
Recall that in a July 8 filing to the US Bankruptcy Court for the Southern District of New York, Russell Crumpler and Christopher Farmer said that 3AC’s co-founders “have not yet begun to engage with the bankruptcy process in any meaningful way.” The statement also claimed that the whereabouts of Soo Joo and Kyle Davies were unknown, with the added risk that Soo and Davies might try to transfer the firm’s assets to outside accounts.
But a published letter from Advocatus Legal LLP asks liquidators whether the court documents mention the “threats of physical violence” received by 3AC’s founders and their families. Legal counsel for 3AC also noted that their clients were “working under great time pressure” as they were also responding to queries from the Monetary Authority of Singapore (MAS).
3AC crypto fund co-founder Su Zhu
In addition, according to Decrypt sources, Suu and Davies “will not be continuing the conversation tonight”, referring to the discussion between 3AC and liquidators scheduled for this week. Next, fund officials are awaiting a response from the liquidators, on the basis of which the bankruptcy proceedings will proceed.
Read also: What's in store for the cryptocurrency market this week: analyst predictions and investor expectations.
Zhu also shared another email on Twitter, accusing the liquidators of sabotaging the previously announced participation in the purchase of Starkware tokens, resulting in a “significant loss of capital on the part of 3AC”. As a reminder, the crypto fund was involved in a $75 million funding round for this startup back in March 2021, when such problems didn’t even smell.
Su Zhu at his workplace
Starkware is a project that is working on a second-tier blockchain-based Ethereum solution called Starknet. It should improve the scalability of the altcoin, but the startup's token has not yet been officially launched. A full list of the exact details of this aspect of the conflict is not available in public sources, but it is speculated that the release of the Starkware token could take place in the near future and it could possibly improve Three Arrows Capital's financial position somewhat.
In the meantime, the fund is engaged in a lawsuit that is likely to end in its complete liquidation. Three Arrows Capital has serious solvency problems, in particular due to the collapse of the Terra project this spring, as well as poor risk management. The failure of 3AC is a serious test for the entire crypto market, as the fund was a significant institutional player on its scale.
We believe the collapse of the Three Arrows Capital fund will be one of the major events in the cryptocurrency world for 2022, along with the failure of the Terra ecosystem. All this proves once again that digital asset volatility is a dangerous thing. And if you don't control risk and use the money you get too freely, even market leaders can become part of history in a matter of weeks.
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