Bankrupt crypto hedge fund Three Arrows Capital (3AC) withdrew more than $2 million worth of Ethereum from Binance on Sunday.
On-chain data shared by Lookonchain on Twitter showed that an address belonging to 3AC withdrew 2,000 ETH worth $2.38 million at around 9 pm ET on Dec. 18. This particular wallet address now holds $7.85 million worth of ETH.
This address holds 6,595 $ETH ($7.85M) now.
— Lookonchain (@lookonchain) December 19, 2022
The unexpected wallet activity sparked discussions within the crypto community as to why these funds were being moved in the first place.
The hedge fund, which filed for bankruptcy earlier this year, is in the midst of liquidation proceedings, while its founders Kyle Davies and Su Zhu are allegedly being largely uncooperative in the process. In a Dec. 3 bankruptcy hearing, 3AC liquidators’ attorney Adam Goldberg said Davies and Zhu were more interested in trying to fix their reputations than help the company’s creditors.
Since their reappearance on Twitter, after several months of radio silence, both Zhu and Davies have been tweeting about FTX’s collapse, and how the exchange and its trading company Alameda Research “hunted their positions,” which they claim ultimately led to 3AC’s downfall.
Meanwhile, its liquidators are still in the dark as to their whereabouts and have claimed that the founders are yet to provide a complete set of records of the hedge fund’s books.
According to a document prepared by 3AC liquidator Teneo and seen by The Block on Dec. 16, the firm’s assets were estimated to be $1 billion as of July, and consist of tokens, NFTs, venture investments and fiat money. Around $238 million of these assets were held in tokens – the value of which is likely to be significantly lower than it was in July given the recent market volatility.
The document also disclosed that 3AC’s assets were worth much less than its liabilities which stood at $3 billion.
Given the lack of “meaningful cooperation” from 3AC’s founders, Teneo said the firm has asked digital asset investigations specialists to look into the firm’s on-chain activities in the months leading up to liquidation.