According to court documents, the founders of the bankrupt crypto hedge fund Three Arrows Capital were not collaborating with the firm's liquidation procedure and their whereabouts were unknown as of Friday.
Lawyers stated in U.S. bankruptcy court documents that representatives appointed to liquidate Three Arrows by a British Virgin Islands judge had "not yet obtained any meaningful assistance" from Kyle Davies and Zhu Su.
Legal counsels for Zhu and Davies informed the liquidators of Three Arrows that their clients intend to collaborate. The advisory firm Teneo is working to gather and protect the hedge fund's assets.
The liquidators and attorneys are set to meet on Monday, while a court hearing is slated for Tuesday.
Russell Crumpler of Teneo stated in a sworn declaration that the liquidators are attempting to prevent the probable "dissipation" of the fund's assets.
In court documents, lawyers for the liquidators stated the danger is heightened because a major amount of the debtor's assets are readily transferable cash and digital assets, such as cryptocurrencies and non-fungible tokens.
Three Arrows, which Zhu and Davies formed during their tenure as traders at Credit Suisse Group AG, fell victim to the worldwide crypto selloff last month.
The BVI judge initiated insolvency proceedings, which were followed by a so-called Chapter 15 bankruptcy file in the United States.
The fund's failure has reverberated throughout the digital asset market, contributing to the failure of at least one crypto platform that counted Three Arrows as a counterparty.
According to court documents, the liquidators of the hedge fund traveled to Three Arrows' office address in Singapore in late June in an attempt to locate the founders.
The door was locked, the computers were inactive, and there was mail crammed under the door. The neighbouring offices reported that no one had entered or left the office in recent days.
Court documents further reveal the liquidators spoke with lawyers representing Davies and Zhu by videoconference last week, but did not interact with the founders directly.
"While individuals representing themselves as 'Su Zhu' and 'Kyle' were present on the Zoom conversation, their video was turned off and they were on mute at all times, never commenting despite being specifically asked questions," Teneo's Crumpler stated in his court declaration.
Monday evening, Advocatus Legal LLP, the Singapore-based law firm that communicated with Three Arrows' liquidators on behalf of the fund's founders, did not immediately respond to a request for comment.
