Liquidators for Three Arrows Capital (3AC) will have to present further documents to grant the permission to subpoena the now-bankrupt crypto hedge fund's founders through Twitter, according to a decision from judge Martin Glenn during a virtual hearing for the Southern District of New York Bankruptcy Court on Dec. 2. Lawyers representing the liquidators in the process claimed that Zhu Su and Kyle Davies, founders of the hedge fund, repeatedly failed to engage with liquidators in the past months. "A communication protocol was agreed between the Liquidators and Founders, but has not yielded satisfactory cooperation," according to a hearing presentation. …

The founders of Three Arrows Capital, or 3AC, the Singapore-based crypto hedge fund with close ties to Terra Labs, have been spending more time engaging on social media and news outlets than dealing with its own liquidation, according to bankruptcy lawyers. In a Dec. 2 hearing in United States Bankruptcy Court in the Southern District of New York, lawyers for 3AC’s liquidators cited founders Zhu Su and Kylie Davies for being “active and responsive to comments via Twitter” but “repeatedly fail[ing] to engage” with liquidators to discuss the company’s assets and related issues. According to the legal team, Zhu and …

The United States Trustee handling FTX’s bankruptcy proceedings has referred to the now-defunct exchange as the "fastest big corporate failure in American history," and is calling for an independent probe to look into its downfall. In a Dec. 1 motion, U.S. Trustee Andrew Vara noted that over the course of eight days in November, debtors "suffered a virtually unprecedented decline in value" from a market high of $32 billion earlier in the year to a several liquidity crisis after a "proverbial 'run on the bank.'" "The result is what is likely the fastest big corporate failure in American history, resulting …

The Japanese subsidiary of the now-defunct FTX crypto exchange has come out with a roadmap to resume withdrawals, after confirming that its customers’ assets are not part of FTX's bankruptcy proceedings. The firm provided an update on Dec. 1, stating it has been able to confirm that its customers’ assets "should not" be part of FTX Japan's estate due to Japanese regulations which mandate that crypto exchanges must separate client funds from their own assets. This was according to Landis Rath & Cobb LLP, the law firm representing FTX Group in the Chapter 11 bankruptcy proceedings. FTX Japan was only …

Former FTX CEO Sam Bankman-Fried apologized or admitted failure at least 12 times during his appearance at the New York Times' DealBook Summit on Nov. 30. In a wide-ranging video interview, Bankman-Fried was asked to answer a number of questions surrounding the downfall of the now-defunct exchange, with some even suggesting that some of his statements could be used to incriminate him in legal proceedings. In a Nov. 30 Twitter post, crypto attorney Jeremy Hogan, Partner at Hogan & Hogan said that the “light cross-examination” of Bankman-Fried at the DealBook Summit has already returned “at least 3 incriminating statements so …

A lawyer for BlockFi told the first day hearing of its bankruptcy proceedings that the crypto lender has $355 million stuck on FTX and that the collapsed exchange’s sister company Alameda Research has defaulted on a $680 million loan. BlockFi filed 15 motions on Nov. 28 which were approved by the court in the first day hearing on Nov. 29, including the redaction of personal details of its 50 largest creditors, and the appointment of Kroll Restructuring Administration as its claims and noticing agent — the same firm chosen by FTX for its chapter 11 bankruptcy case. In a message …

FTX’s former CEO Sam Bankman-Fried has divulged what really went on in the days before it filed for bankruptcy when the exchange selectively reopened withdrawals — only for Bahamian users. In a telephone interview with crypto blogger Tiffany Fong, dated Nov. 16, Bankman-Fried claims to have made the decision to reopen withdrawals to Bahamian citizens as he did not want himself, nor the exchange, to be in a country “with a lot of angry people in it.” “The reason I did it was it was critical to the exchange being able to have a future because that’s where I am …

As crypto lending platform BlockFi filed for bankruptcy, members of the crypto community reacted with mixed feedback as another platform fell during the current bear market. Despite BlockFi citing the FTX contagion as the reason for its bankruptcy filing, podcaster Matt Odell pointed out a different explanation. Odell wrote that the lending platform went bankrupt because it was lending customer funds to high-risk traders who played with leverage recklessly. “This is a tale as old as Bitcoin, leverage kills, and trusted third parties are security holes,” he added. In a tweet, Mario Nawfal highlighted that BlockFi's bankruptcy filing was something …

Institutional crypto services provider Silvergate Capital has confirmed its minimal exposure to the embattled BlockFi crypto lending firm. On Nov. 28, Silvergate announced that its deposit relationship with BlockFi is “limited to less than $20 million of its total deposits from all digital asset customers.” Those deposits totaled $13.2 billion in Q3 according to the firm’s revenue report. It added that BlockFi was not a custodian for its Bitcoin-collateralized leverage loans and the firm has no investments in BlockFi. To quell investor jitters, Silvergate CEO Alan Lane said, “as the digital asset industry continues to transform, I want to reiterate …

Bankrupt crypto exchange FTX has announced it will be “resuming ordinary” cash payments, salaries and benefits to its remaining employees around the world. The announcement came from new FTX CEO John Ray III on Nov. 28, as the insolvency professional looks to help FTX and its approximated 101 affiliated companies (FTX Debtors) navigate their way through the U.S. Bankruptcy Court in Delaware. "With the Court's approval of our First Day motions and the work being done on global cash management, I am pleased that the FTX group is resuming ordinary course cash payments of salaries and benefits to our remaining …

BlockFi announced on Nov. 28 that it has filed for Chapter 11 bankruptcy. The filing in the United States Bankruptcy Court for the District of New Jersey pertains to the company and its eight subsidiaries. The move comes after several days of speculation on the company’s financial health after the collapse of FTX. According to a statement, BlockFi has $256.9 million on hand. It has filed motions “to pay employee wages and continue employee benefits without disruption. It also seeks to “establish a Key Employee Retention Plan to ensure the company” and has created an internal plan to reduce expenses. …

The Bahamas Attorney General (AG) and Minister of Legal Affairs Ryan Pinder has confirmed that the collapsed crypto exchange FTX is the focus of an "active and ongoing" investigation by authorities from the Caribbean nation. In a national statement that was delivered live on the Facebook page of the Office of the Prime Minister on Nov. 27, Pinder explained the "affairs of FTX Digital Markets" are under scrutiny from both "civil and criminal authorities" and Bahamian authorities are working with "a number of specialists and experts and will continue to do so as the need arises." "The Securities Commission, our …