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When Su Zhu and Kyle Davies set out to purchase a super yacht last year, they were riding high, and their hedge fund Three Arrows Capital (3AC) was (or rather seemed to be) in great health. A year later, liquidators have filed a motion seeking to seize the yacht, nicknamed ‘Much Wow,’ and sell it for $30 million.
Teneo, the court-appointed liquidators of 3AC, revealed in their recent filing at the U.S. Bankruptcy Court in the Southern District of New York that they had managed to seize over $35 million in fiat currencies from Singaporean bank accounts. They had also managed to recover $2.7 million from forced redemptions of investments.
Teneo has also taken control of an unspecified amount of 60 different digital assets and NFTs.
“Recovered tokens are held in a digital currency custody account under the Liquidators’ control and converted to USD as necessary,” the filing noted.
The liquidators are also going after Much Wow, the super yacht whose name was inspired by the meme coin Dogecoin.
Zhu and Davies started making payments for the yacht last year and were expected to take ownership this year. This was before LUNA and UST collapsed, and the dominoes began to fall, with 3AC among the most prominent.
According to court filings, the two founders borrowed funds through 3AC and then used them to pay for the yacht. The shipbuilder later terminated the construction of Much Wow due to non-payment of the final amounts owed, Teneo claims. Records show that the 171-foot (52-meter) yacht was sold this year and was renamed RMF.
Davies and Zhu registered the super yacht under Much Wow Limited, a Cayman Islands company. Teneo argues that these funds should fall under them and subsequently be refunded to 3AC’s creditors.
Aside from the liquidations, Teneo accused the two founders of refusing to engage with them, choosing to go on social media instead. They have also continued to make media appearances, most notably on Bloomberg in July and on CNBC last month.
3AC was one of the several casualties of the LUNA collapse in May. The collapse shed a spotlight on the house of cards that the two founders had built, which also included other players like Genesis Global Trading and its parent company, the Digital Currency Group.
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Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
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