Su Zhu, co-founder of crypto hedge fund Three Arrows Capital (3AC), has spoken publicly for the first time since his fund went bankrupt. In a tweet, he complained about obscure warrants in a project called StarkWare.
StarkWare was one of the first to market with an Ethereum scaling solution based on zero-knowledge proofs. Its proprietary programming language was closed-source and required a strict software license. Top venture capitalists backed StarkWare, including Sequoia, Tiger Global, Paradigm, Coatue, GreenOaks, and (drumroll please) 3AC.
Su Zhu’s legal troubles
Su Zhu’s last public statement was on June 14 amid the collapse of his hedge fund. On that day one month ago, he simply posted, “We are in the process of communicating with relevant parties and fully committed to working this out.”
Of course, those communications failed. His fund collapsed, losing some $10 billion peak-to-trough.
Presently, 3AC is in court-ordered liquidation in the British Virgin Islands. It is under Chapter 15 proceedings in U.S. Bankruptcy Court for the Southern District of New York. It’s also under investigation by the Monetary Authority of Singapore.
Its founders are on the run and are only speaking through lawyers. Verge reporters observed a court hearing on Tuesday during which 3AC co-founders Su Zhu and Kyle Davies allegedly appeared on a Zoom call, without video or microphone turned on for the entire call.
On Tuesday, a bankruptcy judge in New York Tuesday approved 3AC’s liquidators to subpoena Su Zhu and Kyle Davies due to their non-cooperation with liquidation proceedings. Their attorneys testified that they did not know their physical whereabouts of the co-founders.
Edit 08:05 UTC, Jul 15: The piece has been corrected and we have removed all mention of BitMEX being the liquidator involved.