Court orders $1B asset freeze for 3AC founders: Liquidator Teneo

The latest court action seeks to prevent the parties from actions that might “frustrate eventual enforcement by the liquidators,” Teneo says


Three Arrows Capital and ALL TEXTURES/Shutterstock modified by Blockworks


A British Virgin Islands court has prohibited the co-founders of insolvent crypto hedge fund Three Arrows Capital (3AC) from moving more than $1 billion worth of assets. 

The order, filed on Monday, bans co-founders Su Zhu and Kyle Davies, as well as Davies’ wife Kelly Chen, from transferring or selling assets amounting to $1.14 billion, 3AC liquidator Teneo said in a statement shared with Blockworks.

Three Arrows Capital filed for bankruptcy in July 2022. Representatives from law firm Latham & Watkins said in a petition at the time: “The debtor’s business has collapsed in the wake of extreme fluctuations in cryptocurrency markets.” 

Read more: 3AC files for bankruptcy as co-founders’ location unknown

The latest court action “results from the ongoing efforts by liquidators Teneo to secure 3AC’s assets, seek recoveries from the founders and Ms. Chen with respect to the collapse of 3AC, and meet the firm’s obligations to its various creditors,” the company said in a statement. 

“The worldwide freezing order has been sought in connection with claims that are being pursued by the liquidators that allege, amongst other things, that the founders should be held responsible for causing 3AC’s position to deteriorate by an amount that is equivalent to the value of the freezing orders sought,” the Teneo statement added. 

Three Arrows Capital last year initiated bankruptcy proceedings a few days after a British Virgin Islands court ordered 3AC to liquidate its assets. Teneo was tapped to manage the company’s insolvency. 

Read more: Most expensive Three Arrows Capital NFTs to be liquidated

Singapore’s central bank in September ordered that Zhu and Davies could not conduct various market activities for nine years. Zhu was arrested in Singapore later that month, Teneo noted in a statement shared with Blockworks. 

“The order is specifically designed to prevent the founders and Ms. Kelly Chen from disposing of or otherwise dealing with assets in any way that might frustrate eventual enforcement by the liquidators,” Teneo said in the statement. “It also sends a clear signal to counterparties and affiliates of the founders of Three Arrows as to their legal obligations and risks.”

A Singapore court granted a similar freezing order on Wednesday, a Teneo spokesperson added.

The 3AC founders and Chen could not immediately be reached for comment.

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