SINGAPORE – Around US$1 billion (S$1.33 billion) in assets belonging to the founders of cryptocurrency hedge fund Three Arrows Capital (3AC) have been frozen by a British Virgin Islands court, according to the firm’s liquidator. 

The court issued an order preventing co-founders Su Zhu and Kyle Davies, as well as Davies’ wife Kelly Chen, from transferring or selling assets worth up to US$1.14 billion, the liquidator Teneo said in an e-mailed statement, adding that it estimates creditors are owed roughly US$3.3 billion. 

3AC, once among the largest crypto-native hedge funds, imploded in 2022 after a series of bad bets.

The failure was part of a crypto rout and spate of collapses in the sector. 

“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,” Teneo said. 

3AC previously operated out of Singapore and filed for bankruptcy in the British Virgin Islands.

Teneo, appointed by a British Virgin Islands court as liquidator, had previously accused the founders of failing to cooperate meaningfully.

The announcement comes a day after a domestic freezing order was issued by the Singapore court, according to Teneo.

It also follows Zhu’s arrest in September at Changi Airport as he tried to leave the country.

Singapore has banned Zhu and Davies from conducting any regulated activity in Singapore. 

Zhu and Davies are among the one-time stars of the crypto bull run whose reputations and fortunes have fallen amid revelation of risky practices.

Sam Bankman-Fried, the founder of FTX Trading, was convicted in November of fraud after a month-long trial that pitted his testimony against that of some of his closest friends. BLOOMBERG