The founders of a cryptocurrency firm called Three Arrows Capital (also known as 3AC) have gone missing. The crypto firm filed for Chapter 15 bankruptcy in the British Virgin Islands in late June. Since then, creditors have swirled around the business for weeks in an attempt to squeeze back some of their money.
However, founders Kyle Davies and Zhu Su have apparently vanished into thin air. Lawyers for the firm say they can’t confirm either man’s whereabouts.
The firm defaulted on a $670 million loan from another crypto broker, Voyager Digital, in June. This default pushed Voyager over the edge into bankruptcy, revealing a domino effect in the crypto industry as investors sell out of the volatile asset.
Now, creditors are calling on the authorities to bring Davies and Su in so they can recoup some of their losses.
Davies and Su both skipped out on a court hearing Tuesday morning that would have set the terms of their company’s liquidation. Advisory firm Teneo will help liquidate the embattled Three Arrows’ remaining assets so it can pay off some of its debts. However, experts believe that 3AC simply lost too much money in too short a time for creditors to expect to recover much money.
Earlier this year, 3AC possessed as much as $10 billion in crypto assets. By April, it held $3 billion in assets. Liquidators who visited the firm’s office in Singapore reported that the door was locked and no one was inside, and neighbors said they hadn’t seen anyone in the building since early June at the latest.
Court filings indicate that Davis and Su “have not yet commenced cooperating with the proceeding in any meaningful way.” Some creditors fear that the two might take what few crypto assets they will possess and liquidate them away from the court’s notice.
Su is reportedly attempting to sell a property in Singapore. Liquidators are concerned that 3AC’s assets could vanish before creditors have a chance to claw back their investments.
The collapse of firms like 3AC is weighing heavily on the crypto industry. Major exchange platforms like Celsius and Babel Finance have paused Bitcoin trades as a response to the massive downturn in the value of digital currencies.
Some economists predicted this outcome, saying that the cryptocurrency bubble was due to burst eventually. After all, it’s hard to keep investors interested in assets that have no inherent value.