The walls are closing in around one embattled crypto hedge fund as the legal system issues a ruling on behalf of its jilted creditors.
According to a new CNBC report, a federal judge in New York has ordered Three Arrows Capital’s (3AC) remaining assets to be frozen as part of an ongoing bankruptcy proceeding.
The report says that while the whereabouts of 3AC co-founders Zhu Su and Kyle Davies remain unknown, there is concern that they will attempt to strip away funds before the company begins the formal process of liquidating its assets.
Judge Martin Glenn’s written decision specifies that approved liquidation firm Teneo has sole authority to “transfer, encumber or otherwise dispose of any assets of the Debtor located within the territorial jurisdiction of the United States.”
The ruling further grants Teneo subpoena powers against not only Su and Davies but also any financial institutions and cryptocurrency exchanges that conducted business with 3AC.
The decision against Three Arrows Capital comes on the heels of several developments surrounding its relationship with the crypto marketplace Voyager Digital.
Back in late June, Voyager filed formal notice of default to 3AC seeking repayment of a loan of about $650 million which was comprised of 15,250 Bitcoin (BTC) and $350 million worth of the dollar-pegged stablecoin US Dollar Coin (USDC).
Voyager then announced several days later that it was temporarily halting trading activities on its platform due to liquidity issues arising from 3AC’s outstanding debt, before last week initiating restructuring process by filing for bankruptcy protection.
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