Leaked documents show 3AC owes its creditors $3.5 billion

According to an affidavit from Three Arrows Capital co-founder Kyle Davis, the struggling venture firm owes his wife $65 million, while his partner – Su Zhu had a $1.4 billion stake in the company. The court document was filed on June 27, and in it Kyle Davis goes under the pseudonym “Robert Gardner”, it was made public on Monday when the company overseeing the hedge fund’s liquidation (Teneo) shared more than 1,000 pages of court documents online. Later, the files were taken down, however they were already saved and uploaded elsewhere.

The leaked documents show that 3AC owes a total of $3.5 billion to its creditors, which include more than 20 different companies part of which is a $2.3 billion debt owed to Genesis. The court documents also reveal that 3AC wasn’t communicating with its creditors weeks prior to the affidavit filling, apparently the company stopped engaging with its creditors around the time Su Zhu posted his tweet stating that 3AC is “in the process of communicating with relevant parties”.

Kyle Davis’ affidavit states that the venture firm was overwhelmed with claims from its lenders and investors and received default notices from 32 of its creditors including DRB Panama – the parent company of the popular derivatives exchange – Deribit, which terminated its loan agreement with 3AC demanding immediate repayment of $80 million.

DRB Panama claims it noticed 3AC transfer $30.7 million worth of USDC and $900,000 USDT out of one of its wallets, then take out $17 million worth of ETH from crypto exchange FTX, and move most of these funds onto Aave. The company also claims that on June 16 on-chain data shows 3AC transferred $10.9 million USDT to an unknown wallet address.