In a significant turn of events for the cryptocurrency hedge fund Three Arrows Capital (3AC), a court in the British Virgin Islands has issued a worldwide asset freeze worth $1.14 billion on the fund’s co-founders: Su Zhu and Kyle Davies, along with Davies’ wife Kelly Chen.

The order, announced as part of the liquidators’ efforts to recover the fund’s assets and provide returns to its creditors, represents a pivotal step in the ongoing fallout of 3AC’s bankruptcy last year. Following a massive sell-off in assets, which resulted in substantial losses due to the plummeting prices of cryptocurrencies, the fund sought relief through legal proceedings and the appointment of liquidators.

Teneo, the appointed liquidators, revealed that the asset freeze order prohibits Su Zhu, Kyle Davies, and Kelly Chen from dealing with their assets, including transferring or selling them, up to a total value of $1.144 billion. This steadfast measure aims to safeguard the assets and serve as a clear directive to counterparties and affiliates regarding their legal obligations and the associated risks.

This development marks an extension of efforts by the liquidators, as the inclusion of Kelly Chen in the asset freeze order widens the scope of potential asset recovery for the fund’s creditors.

Amidst the hurdles faced by the liquidators in reclaiming Three Arrows Capital’s assets, the estimated value of the fund’s assets as of December 18 stands at $1.16 billion. However, a daunting total of 154 claims, amounting to $3.4 billion, have been filed against the estate, intensifying the complexity of the ongoing liquidation process.

In a promising development, Teneo’s joint liquidators anticipate that creditors are poised to receive 45.74% of their claims from the bankrupt estate, with initial distributions set for the first quarter of the upcoming year. This signifies a crucial milestone in the eventual resolution of the fund’s bankruptcy and the distribution of returns to its creditors.

The resolution of litigation against parties including Digital Currency Group (DCG), Genesis, and BlockFi has been instrumental in contributing an estimated $292 million to the reported assets. Notably, while the BlockFi settlement is pending approval, further progress in resolving claims against the estate is anticipated.

This ongoing saga surrounding Three Arrows Capital underscores the intricate and multifaceted nature of liquidation proceedings, exemplifying the intricate challenges and complexities involved in recovering assets and facilitating returns for creditors in the aftermath of a high-profile fund’s downfall.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.