Singapore High Court Rejects Dismissal Plea from Three Arrows Capital

The High Court of Singapore has turned down Three Arrows Capital’s (3AC) request to dismiss a lawsuit filed against it by DeFiance Capital. The entity aims to separate its assets from 3AW creditors independently of the liquidation process.

The primary argument revolved around the whereabouts of the crypto assets in question. According to the filing, these assets have no physical location and instead exist as records within a network of computers.

Court Rejects 3AC’s Bid to Dismiss DeFiance Capital Lawsuit
In a recent court filing, the judge dismissed Three Arrows Capital’s plea to have the lawsuit filed by Cheong Jun Yoong, the founder of DeFiance Capital, thrown out.

Consequently, the judge mandated that Three Arrows Capital must cover Cheong’s legal fees.

“Accordingly, I dismissed the defendants’ application. I ordered the defendants to pay costs to the claimant fixed at $15,000 plus disbursements to be fixed by me if not agreed.”

The filing clarified that although Cheong’s assets resided on the 3AC platform, he retained independent control.

This stemmed from his prior management of these assets for a circle of friends and former colleagues. DeFiance Capital insisted on the segregation of its funds into separate accounts, allowing Cheong to retain complete control over the cryptocurrency assets within his fund.

Consequently, the court supported DeFiance Capital in its pursuit of legal action against Three Arrows Capital.

In December 2023, BeInCrypto reported that 3AC founder Su Zhu was questioned by lawyers from Teneo, the appointed liquidators.

3AC Among Several Companies That Collapsed in 2022
The queries aimed to uncover details about 3AC’s failure and its crypto assets. The fund collapsed in July 2022, a year when the crypto industry saw several major crypto firms collapse.

Screen Shot 2024 02 01 at 8.55.39 am Screen Shot 2024 02 01 at 8.55.39 am

Major crypto-asset platforms that have entered bankruptcy since the beginning of 2022. Source: Federal Reserve Bank of Chicago

However, Zhu’s questioning was approved after his arrest on September 29 at the Singapore airport.

BeInCrypto reported that Zhu was arrested at Changi Airport as he attempted to leave Singapore.

Authorities also granted a similar order against another 3AC co-founder, Kyle Davies, but so far, they have been unable to track him down.

Read more: FTX Collapse Explained: How Sam Bankman-Fried’s Empire Fell

Zhu was held for four months due to non-cooperation with 3AC’s winding-up process. However, he was released in December 2023.

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