$1 Billion in Three Arrows Founders’ Assets Frozen by Court

A court has reportedly frozen $1 billion in Three Arrows Capital’s founders’ assets.

The ruling came down earlier this week from a court in the British Virgin Islands, Coindesk reported Thursday (Dec. 21), citing an email from the bankrupt cryptocurrency hedge fund’s liquidators, Teneo Restructuring.

According to the report, the court order applies to founders Su Zhu and Kyle Davies, along with Davies’ wife, Kelly Chen. Coindesk says Teneo has been seeking $1.3 billion and included Chen in the order to use all available paths to maximize returns to Three Arrows Capital’s creditors, who are owed north of $3 billion.

“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 a statement.

Three Arrows Capital (3AC) had been one of the crypto sector’s more prominent players, but was forced into bankruptcy last July following a big selloff in assets, triggered partially by the collapse of the Terra blockchain.

When Terra crashed last May, its token’s collapse spread across the market. Three Arrows Capital was unable to meet margin calls from lenders, which led to its insolvency.

It was part of a wave of crypto bankruptcies that rocked the market last year, the fallout of which continued into this year with the prosecution and conviction of FTX founder Sam Bankman-Fried, and regulatory action against companies like Coinbase and Binance.

But as noted here Wednesday (Dec. 20), the crypto sector seems to be closing 2020 on a positive note, with the market capturing the attention of investors and enthusiasts amid a surge in popularity of memecoins and non-fungible tokens (NFTs).

Although the possibility of bitcoin exchange-traded funds (ETFs) receiving regulatory approval has garnered a lot of press, altcoins such as dogwifhat, that have been generating substantial gains, with these speculative tokens seeing jumps of over 1,000% within a matter of days, drawing in investors with their low trading prices.

And with this market resurgence, larger tokens such as Solana and Avalanche have also seen a jump in value, making them some of the biggest gainers of the year.