Teneo, the court-appointed liquidators of bankrupt venture fund Three Arrows Capital (3AC) are claiming $1.3 billion from its co-founders, Su Zhu and Kyle Davies.

Citing a source familiar with the liquidators’ claims, Bloomberg reported that Teneo sought the amount from the founders to cover losses incurred in the last couple of months before the fund’s collapse in July 2022 after it took on “significant leverage.”

Decrypt has reached out to Teneo for comment and will update this article should we receive a response.

The liquidators reportedly met with the hedge fund’s creditors on Tuesday to discuss the allegations against 3AC’s co-founders. They claim that Zhu and Davies continued taking on leverage in May and June of 2022 despite the firm being “already insolvent,” which increased the total losses.


Until now, the liquidators had secured assets that belonged to the company, including $35.6 million cash held in bank accounts, a $30 million yacht, and certain NFTs.

However, these represent a small portion of the $3.5 billion hole in the company’s balance sheet revealed at the time of bankruptcy.

The latest $1.3 billion claim by the liquidators will look to seize assets owned by Zhu and Davies personally.

In a July 2022 interview, 3AC’s founders attributed the hedge fund’s collapse to over-exposure to Terra, staked Ethereum, and Grayscale’s Bitcoin trust.


Zhu and Davies recently attempted to stage a comeback with a new venture capital fund 3AC Ventures, revealing investments in projects including bankruptcy claim exchange Open Exchange (OPNX).

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