First Mover Asia: It won’t be easy for creditors to unravel the Three Arrows case, Singapore lawyer says

The fallout from the collapse of the cryptocurrency industry continues, with new filings from Celsius, layoffs at OpenSea, and a short token squeeze from Voyager. MORE: We spoke to a Singapore-based lawyer about the Gordian knot that is the Three Arrows bankruptcy case.

Price: Bitcoin rises alongside US stocks.

Insights: Yuankai Lin, a partner at RPC Singapore, a global law firm, told CoinDesk’s Sam Reynolds that Three Arrows’ creditors are going to face an uphill battle.


  • Bitcoin (BTC): $20,579 +2.1%
  • Ether (ETH): $1,193 +7.4%
  • S&P 500 daily close: 3,790.38 −0.3%
  • Gold: $1,709 per troy ounce −1.4%
  • Daily Close Ten-Year Treasury Yield: 2.96% +0.06

Bitcoin, Ether, and Gold prices are taken at approximately 4 p.m. PT. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk indices is available at

Bitcoin (BTC) rose for a second day, remaining comfortably around $20,500.

The biggest cryptocurrency acquired during the US session with stocks, rose as traders changed bets that the Federal Reserve would raise interest rates by a full percentage point – considered extreme – during of a meeting later this month. Higher interest rates should theoretically make high-risk assets such as cryptocurrencies and stocks less attractive as investments, so crypto traders are watching economic data closely.

“We are still constructive on crypto-asset prices in the 2H, but we likely have residual macro-darkness to navigate in the near term,” Sean Farrell, vice president of digital asset strategy at Fundstrat, wrote Thursday.

The fallout continued after the industry tumbled in the first half, with bitcoin still trading less than a third of the all-time high price of around $69,000 reached in late 2021.

A day after struggling crypto lender Celsius filed for bankruptcy protection in the United States, the company filed court documents acknowledging a $1.2 billion holdback in its balance sheet. CoinDesk also reported that Celsius’ mining unit last month auctioned off thousands of newly purchased mining computers, and prices for “rigs,” as they are called, have plummeted to almost two years old. .

NFT trading platform OpenSea has laid off around 20% of its staff, with CEO Devin Finzer citing an “unprecedented combination of cryptocurrency winter and large-scale macroeconomic instability”.


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Three Arrows creditors face uphill fight against TPS Capital and Three Arrows Singapore, says Singapore lawyer

By Sam Reynolds

Three Arrows’ bankruptcy case appears to be well underway in US courts in New York, and a question on everyone’s mind will be the value of its assets. Co-founders Su Zhu and Kyle Davies have been ordered to compile a list of the cash and cryptocurrency the company has access to, but there’s also the issue of related entities.

As Three Arrows Capital collapsed under the immense pressure of one of the biggest cryptocurrency declines in history, its over-the-counter trading desk Tai Ping Shan (TPS) Capital continued to trade. While the company was once described on LinkedIn as “the official OTC desk of Three Arrows Capital”, it has since changed the language to distance the two companies and has publicly asserted its “independence” from Three Arrows.

A CoinDesk investigation found that despite previous language on the front end (still retained by Google) asserting a relationship, on the back end there is a concerted effort to create a legal firewall between the two companies by the through a constellation of companies registered in Singapore, the British Virgin Islands and the Cayman Islands.

Yuankai Lin, a partner at RPC Singapore, a global law firm, told CoinDesk that Three Arrows’ creditors are going to face an uphill battle.

Lin said their case will depend on a court’s ability to be satisfied that Three Arrows and TPS Capital were run as a “working whole.”

“Creditors will have to show that TPS Capital and TAC are not truly independent of each other and that the guiding mind behind TPS Capital is in fact TAC,” Lin told CoinDesk via email. “They will have to present that the separate ownership of companies is a facade intended to evade legal obligations or to conceal the true situation. »

The courts will decide

Even if creditors were able to prove that TPS Capital is an effective subsidiary of Three Arrows — Lin said that “in substance, TPS Capital is effectively a subsidiary of Three Arrows” — that might not be enough to win a case.

“A holding company is legally allowed to create subsidiaries in order to minimize its liabilities. Creditors will need to prove that TAC and TPS Capital were managed as a functional whole,” Lin said.

Regarding mind control and functional sets, it should be noted that the company in liquidation is the British Virgin Islands entity of Three Arrows Capital.

Singapore Companies Registry filings show that its shares are wholly owned by Zhu and Davies. The fund is believed to control significant assets, given that Securities and Exchange Commission documentation shows that it split its nearly $1 billion (January 2021) purchase of Grayscale Bitcoin Trust among the Singapore entities. and BVIs.

Digital Currency Group is the parent company of Grayscale and CoinDesk.

Lin said that in order for the liquidators, and therefore the creditors of Three Arrows BVI, to get their hands on Three Arrows assets in Singapore, the court would have to determine that the Singapore entity is a subsidiary – therefore an asset. – from BVI.

Lifting of the corporate veil

“The starting position is that Three Arrows Singapore is not an asset of Three Arrows BVI or the United States, and the bankruptcy proceedings in the United States and the liquidation proceedings in the BVI will not affect Three Arrows Singapore” , Lin said. “It is possible that the liquidators, after further examining the parent company, will ask the court to lift the veil of the company and examine the directing mind (s) behind Three Arrows Singapore. »

One result, according to Lin, is that the court may conclude that the separate ownership of the corporations is a facade designed to evade legal obligations or to conceal the true situation. If so, a court could rule that Three Arrows Singapore was “in substance a subsidiary.”

“In the Singapore courts, how does the relationship between [the BVI, U.S., and Singapore entities] is depicted on the companies’ website or advertising materials wouldn’t matter,” Lin said. “The real test is the actual relationship between the entities, and the court will consider whether there is actual evidence that Three Arrows Singapore is in fact a subsidiary. »

Alternatively, the court could consider whether all of the entities are in fact controlled by the same parties and were “alter egos of this same dominant mind”.

Lin noted that previous case law in Singapore on this matter will likely work in favor of Three Arrows.

“It should be noted that instances of the lifting of the corporate veil are rare as the courts are generally very respectful of the doctrine of separate legal personality,” he concluded.

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