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Courts issue subpoenas for 'missing' Three Arrows Capital founders via Twitter
(Kitco News) - In a move that is becoming increasingly commonplace in the age of the internet and social media, the U.S. Bankruptcy Court in the Southern District of New York issued subpoenas for Three Arrows Capital (3AC) founders Zhu Su and Kyle Davies via Twitter on Thursday.
The subpoenas, which require the founders to “produce documents, information, or objects or to permit inspection of premises in a bankruptcy case,” were issued after 3AC liquidators were granted permission from authorities in both Singapore and the United States.
@zhusu and @KyleLDavies jpg copies of orders made by the Supreme Court of Singapore against Mr Zhu, Mr Davies and Three Arrows Capital Pte. Ltd. are attached to this tweet by way of service. An unredacted copy of the order was served via email and can be provided upon request. pic.twitter.com/NVFd3pUhi3
— 3ACLiquidation (@3ACLiq) January 5, 2023
Teneo, the advisory firm that has been tasked with liquidating assets belonging to the insolvent crypto hedge fund, originally filed a motion last October asking a U.S. court to grant it permission to serve subpoenas to the hedge funds founders “via alternative means.”
In a comment provided to Kitco Crypto by Teneo, the firm said that it remains “focused on diligently advancing the liquidation process for Three Arrows Capital Limited in order to maximize asset recoveries on behalf of creditors. The founders have unfortunately resisted cooperating in these efforts, and as such, we have received authority from courts in both the US and Singapore to serve them targeted and comprehensive discovery demands through email and their frequently-used Twitter accounts.”
The unconventional subpoenas were required due to the fact that the whereabouts of Su Zhu and Kyle Davies are currently unknown, with Teneo saying that the standard contact methods have not had any success in contacting them.
“A communication protocol was agreed between the liquidators and founders but has not yielded satisfactory cooperation,” Teneo said during a hearing presentation on Dec 2.
This list of information being requested in the subpoenas includes access account information, seed phrases and private keys for 3AC's digital and fiat assets; details about the securities and unregistered shares; and any accounts held on centralized or decentralized exchanges, along with any other tangible or intangible assets.
Su and Davies have been asked to "furnish all documents available to you regardless of whether this information is possessed directly by you, your agents, representatives, employees, or investigators; or by any other legal or non-legal entities controlled by or in any manner presently or precisely affiliated with you."
If the requested documents are no longer in their possession, custody or control, the subpoena requires them to "state the date and nature of the document and explain why the document is unavailable."
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At the height of its glory days, prior to the collapse of Terra/Luna, 3AC had a net worth of $10 billion. The hedge fund ultimately had to file for Chapter 15 bankruptcy on July 1 after a series of large directional trades in Grayscale Bitcoin Trust (GBTC), Luna Classic (LUNC) and Staked Ether (stETH) went awry.
The firm had also borrowed funds from over 20 large institutions, which helped contribute to a cascading contagion event that saw numerous firms declare bankruptcy, including Celsius and Voyager Digital.
The bankruptcy process for 3AC has faced challenges in recent months due to the unknown whereabouts of its founders. It speculated that Su and Davies are currently residing in Indonesia and the United Arab Emirates, where it is difficult to enforce foreign court orders.
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