Three Arrows Capital Founders Bought $50M Yacht Before Bankruptcy

In March, Three Arrows Capital ran a crypto fund with an estimated $10 billion in assets, but on July 1, the company declared bankruptcy. According to court filings, the founders of the insolvent hedge fund Three Arrows Capital put a down payment on an undisclosed $50 million boat before the company went bankrupt.

Everyone can agree that Bitcoin is volatile, although opinions on it vary widely. Valuations can rise to dizzying heights and then fall back to earth just as swiftly. Three Arrows Capital, a Singapore-based hedge fund that declared bankruptcy on July 1, serves as an illustration of that disparity.

A British Virgin Islands court ordered Three Arrows Capital to liquidate its assets late last month after being sued for failing to pay its obligations. However, as evidenced by records from Singapore’s High Court made public on Monday, 3AC founders Su Zhu and Kyle Davies put a down payment on a $50 million yacht before the suffering brought on by the crypto winter.

The filing implied that the down payment was made with borrowed funds. A request for a response was sent to Three Arrows Capital, but they did not react right away.

The word “yacht” is mentioned 14 times in the 3AC liquidation docs.https://t.co/IlRVuIw7vP pic.twitter.com/dSoqXeHIgv

— mhonkasalo ? (@mhonkasalo) July 18, 2022

Charles McGarraugh, the chief strategy officer at Blockchain.com, to whom 3AC owes $302 million according to court records, made the revelation. In an affidavit, McGarraugh stated that Zhu and Davies’ extravagant acquisitions frightened him.

“For example, upon information and belief I understand that Messrs. Zhu and Davies reportedly made a down payment on a USD $50 million yacht,” he wrote to the Singapore High Court. “It is also my understanding that Mr. Davies intends this yacht to be larger than any yacht owned even by Singapore’s richest billionaires.”

McGarraugh also cited Zhu’s $35 million Singapore property purchase last December.

I’m still blown away by the 3AC.

I admired Zhu Su and Kyle Davies and what they built.

Now they’re liquidated and on the run after spending $50 Million on a yacht.

— Ash – DeSo – Web3 Maxi ?? (@investindigital) July 18, 2022

The main finding of the proceedings has been that 27 different crypto creditors are owed $3.5 billion by 3AC. A large portion of this, $2.36 billion, is owed to only one company, Genesis. The affidavits were submitted on July 7, but Teneo, the company in charge of 3AC’s liquidation, only made them public on Monday.