The lasting agony of 3AC: Law Decoded, July 18-25

The late spring and summer months of 2022 would be remembered not only for their extreme temperatures across the globe but also for a crushing streak of large crypto companies falling apart. Terra Lab in May, Celsius in June and now, the lasting agony of a Singapore-based crypto hedge fund Three Arrows Capital (3AC). Technically, 3AC was ordered for liquidation by a court in the British Virgin Islands on June 27, but it was last week, which has seen some further developments around the firm. 

The liquidators of 3AC are brutally demanding access to the company’s Singapore headquarters due to the “virtual radio silence from the management/directors of the Company.” They believe the office may contain cold wallets or information on how to access 3AC trading accounts, which the liquidators want to access before any of them is removed or destroyed. This desire is perfectly understandable, given the sums that had been loaned to 3AC by the creditors — they appeared to be far greater than in earlier reports.

The scandal around failed hedge fund grew so big that the managing director of the Monetary Authority of Singapore (MAS) even decided to publicly disavow the company’s ties to Singapore, claiming 3AC (and TerraForm Labs as well) had “little to do” with crypto regulation in the country. At the same time, the founders of 3AC have finally resurfaced after five weeks of no known whereabouts. In an interview, Su Zhu and Kyle Davies admitted their problem with bull market overconfidence and revealed their closeness to Terra, which had crystallized in a $500 million worth of investment going to zero.

New raids in South Korea in the aftermath of Terra’s collapse

As the investigation into Terra’s collapse continues, prosecutors in South Korea have reportedly executed a search and seizure in 15 firms, including seven crypto exchanges. The list included such entities as Upbit, Bithumb, Coinone, Korbit and Gopax. Authorities reportedly obtained data related to TerraUSD Classic (USTC) (formerly UST) and Terra…

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