The founders of Three Arrows Capital, a formerly prominent crypto hedge fund that recently went bankrupt, are nowhere to be found as of Friday and hence are not cooperating with its liquidation process, Bloomberg reported Tuesday, citing court filings. Recall that Three Arrows towards the end of June was ordered to liquidate by a court in the British Virgin Islands. While a court hearing is set for Tuesday, there has not yet been "any meaningful cooperation” from 3AC founders Kyle Davies and Zhu Su, lawyers said in the filings, as reported by Bloomberg. “Here, that risk is heightened because a substantial portion of the Debtor’s assets are comprised of cash and digital assets, such as cryptocurrencies and non-fungible tokens, that are readily transferable,” the liquidator's lawyers said in court papers, as quoted by Bloomberg. The founders, meanwhile, have provided details about the fund's assets to the liquidators and they will keep working to find information regarding other assets. Overall, "our good faith to cooperate with the Liquidators was met with baiting," Zhu wrote in a Twitter post. Three Arrows' meltdown started after it failed to meet margin calls from its lenders after its crypto bets turned sour amid a broad market downturn. That came shortly after it incurred at least $400M in liquidations. It wasn't until the beginning of July when 3AC filed for Chapter 15 bankruptcy. In mid-June, Three Arrows looked at potential insolvency.
