SEC And CFTC Probe 3AC Over Allegations Of Investor Conduct Violations

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Su Zhu; Photo Source: Bloomberg

US regulators, SEC and CFTC, investigate Three Arrows Capital (3AC) for potentially misleading its investors.

Until recently, crypto hedge fund 3AC was one of the top firms in the crypto industry, and managed assets amounting to $18B. 

However, the company was forced to declare bankruptcy following the TerraUSD crash which caused 3AC to hit margin calls on its loans. The collapse of 3AC impacted over 20 crypto firms, including Voyager and BlockFi.

Now, the SEC and CFTC are probing 3AC to ascertain if the troubled company misled its clients about its balance sheet. The regulators are also investigating 3AC for failing to register with the two agencies.

It is worth noting that the whereabouts of Su Zhu and Kyle Davies, 3AC’s Co-Founders, remain unknown. 

Teneo, the firm handling 3AC's liquidation, claimed that it tried to contact the two via “conventional channels” but received no response.



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Teneo earlier stated that Zhu and Davies did not fully cooperate with liquidators in the unwinding process. It noted that the Co-Founders have spoken with Teneo only once since an initial Zoom conference in July, adding,

“The founders, through counsel, have maintained the limited information provided to us to date.”

Written by
Ayush Pande

US regulators, SEC and CFTC, investigate Three Arrows Capital (3AC) for potentially misleading its investors.

Until recently, crypto hedge fund 3AC was one of the top firms in the crypto industry, and managed assets amounting to $18B. 

However, the company was forced to declare bankruptcy following the TerraUSD crash which caused 3AC to hit margin calls on its loans. The collapse of 3AC impacted over 20 crypto firms, including Voyager and BlockFi.

Now, the SEC and CFTC are probing 3AC to ascertain if the troubled company misled its clients about its balance sheet. The regulators are also investigating 3AC for failing to register with the two agencies.

It is worth noting that the whereabouts of Su Zhu and Kyle Davies, 3AC’s Co-Founders, remain unknown. 

Teneo, the firm handling 3AC's liquidation, claimed that it tried to contact the two via “conventional channels” but received no response.



Get Our Free Newsletter

Subscribe to our newsletter to get tips, our favorite services, and the best deals on Bitcompare-approved picks sent to your inbox


Teneo earlier stated that Zhu and Davies did not fully cooperate with liquidators in the unwinding process. It noted that the Co-Founders have spoken with Teneo only once since an initial Zoom conference in July, adding,

“The founders, through counsel, have maintained the limited information provided to us to date.”

Written by
Ayush Pande