Are FTX to blame for the bankruptcy of 3AC?
2022.12.02 13:04
Are FTX to blame for the bankruptcy of 3AC?
Budrigannews.com – According to bankruptcy lawyers, the founders of Three Arrows Capital, or 3AC, the crypto hedge fund based in Singapore with close ties to Terra Labs, have been engaging in social media and news outlets more than dealing with the fund’s own liquidation.
Lawyers for 3AC’s liquidators cited founders Zhu Su and Kylie Davies for being “active and responsive to comments via Twitter” but “repeatedly failing[ing] to engage” with liquidators to discuss the company’s assets and related issues at a hearing on December 2. The legal team claims that Zhu and Davies have only had “limited conversations” with liquidators and frequently change jurisdictions, reportedly traveling to Bali and the UAE.
Adam Goldberg, a lawyer with Latham and Watkins who is representing the liquidators of 3AC through the advisory firm Teneo, said that the founders had talked to reporters at CNBC and Bloomberg “in an apparent effort to rehabilitate their reputations” and had taken advantage of the collapse of another significant crypto company:
“Since the collapse of FTX, Mr. Davies has appeared on CNBC and both of the founders have been very active on Twitter, calling out FTX and advancing the theory that FTX caused the debtors’ collapse. It’s interesting, to say the least, that the first time we’ve heard this theory that FTX caused the downfall of this debtor was after FTX’s own sensational collapse.”
Goldberg said that Zhu and Davies’ tweets asking former FTX CEO Sam Bankman-Fried to “reveal the truth” while seemingly avoiding responsibility for 3AC creditors were “ironic.”He offered a possible extension of his October proposal for an “alternative means” to subpoena Zhu and Davies that included methods aimed at forcing both the 3AC founders to comply with court proceedings. It was not clear where the 3AC founders lived at the time of publication.
On July 1, 3AC presented a Chapter 15 bankruptcy petition to the bankruptcy court in New York.The liquidation of the company, which at one point managed assets worth more than $10 billion, has probably contributed to the ongoing bear market in cryptocurrencies.Crypto lending companies such as Voyager Digital, Celsius Network, BlockFi, and FTX have all reported liquidity issues following their collapse, which ultimately led to bankruptcy filings.
