Three Arrows Capital liquidators get approval from Singapore High Court on liquidation order: Bloomberg

Quick Take

  • The Singapore High Court granted a request from the liquidators of Three Arrows Capital to probe the fund’s local assets. 
  • The move means the liquidators will be able to request all financial records associated with the fund that are held in Singapore. 

Teneo, the financial advisory firm appointed to liquidate the assets of defunct crypto hedge fund Three Arrows Capital, secured recognition from the Singapore High Court to probe the hedge fund’s local assets, according to a Bloomberg report that cited sources familiar with the matter. 

The Singapore High Court granted the request from Teneo on Monday, meaning it legally recognizes the liquidation order that Teneo originally filed in the British Virgin Islands (BVI). Liquidators started petitioning the court for recognition in mid-July, The Block reported. 

The nod from the Singapore High Court means that Teneo will be able to request all financial records associated with Three Arrows Capital that are held in Singapore, such as bank accounts, real estate, and assets like cryptocurrencies, according to the Bloomberg report. The hedge fund was initially based in Singapore before relocating to the BVI last year. 

New-York based Teneo was appointed to handle the liquidation of Three Arrows Capital in June on the orders of the Eastern Caribbean Supreme Court in the BVI's High Court of Justice. 

Three Arrows Capital started to face financial issues following the implosion of the Terra ecosystem in mid-May. Losses from its investments in Terra's native token Luna, coupled with subsequent turbulence in crypto markets, prompted a string of liquidations by the hedge fund's lenders, resulting in its collapse.

Teneo has thus far gained control of at least $40 million of Three Arrows Capital’s assets, according to a report from Bloomberg. This is only a fraction of the total owed by the company to creditors. Crypto trading firm Genesis lent $2.36 billion to Three Arrows Capital. Having taken on Genesis' liabilities, Digital Currency Group (DCG) made a $1.2 billion claim against the hedge fund. 

The Singapore court ruling comes after Three Arrows Capital filed for Chapter 15 bankruptcy in July. Its founders — Su Zhu and Kyle Davies — have been mostly unreachable since, according to Teneo. Court documents show that both had "failed to cooperate" during the process.  

However, in mid-July, the pair spoke to Bloomberg in a wide-ranging interview about the collapse of the fund. 

Representatives for Teneo as well as Zhu and Davies did not respond to Bloomberg’s request for comment on recent developments. 

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