Crypto Hedge Fund Meltdown Getting Weirder Every Day

In a crypto tale as old as time, the founders of a failed crypto hedge fund can’t be located.

According to the liquidators for Three Arrows Capital—a fund whose sudden insolvency has spread fear and contagion across the crypto realm—the whereabouts of Su Zhu and Kyle Davies are unknown.

“We don’t know where they’re located, today,” said Adam Goldberg, the liquidators’ lawyer, during a court hearing on Tuesday.

After Goldberg stated that Zhu and Davies haven’t cooperated, and that attempts to find them have failed, Chief Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York granted liquidators permission to subpoena Zhu and Davies.

No one is entirely sure where Zhu and Davies are, but sleuths on crypto Twitter are hot on their trail. “FatManTerra,” a pseudonymous sleuth who amassed a following after the Terra stablecoin collapse, agreed with the popular suspicion their current location is “most likely Dubai, but no one is 100% sure, even close partners.”

Zhu and Davies weren’t always so secretive. As recently as March, Three Arrows managed $10 billion in assets, and Zhu in particular was fond of popping up and loudly offering opinions to anyone who would listen.

On Friday, lawyers for Three Arrows’ creditors claimed Zhu and Davies have “not yet begun to cooperate…in any meaningful manner,” adding that the two kept their camera and audio off at an initial Zoom meeting.

Zhu, who was previously very active on Twitter before his fund’s demise, resurfaced on the platform on Tuesday to deny that Three Arrows hasn’t cooperated. “Sadly, our good faith to cooperate with the Liquidators was met with baiting,” he wrote.

Zhu also posted two letters from his lawyer—one claiming the Three Arrows founders and their families have “received threats of physical violence,” and the other stating they were “extremely concerned” the liquidators’ were mishandling the assets. But Zhu did not say where he is or if he will turn up to comply with a subpoena issued by the New York court.

Others chimed in to agree with FatManTerra, mentioning that Zhu’s current set location on his Twitter profile is Dubai.

Action Line: When something seems too good to be true, there’s a decent chance the founders will end up disappearing with your money. Speculation relies on the greater fool. Investing is the process of accumulating wealth over time using the power of compound interest. If you need help building a portfolio for investing, click here to contact me. If you want to get to know me better before we talk, click here to sign up for my free monthly Survive & Thrive letter.