3AC liquidators sue co-founder Zhu Su's wife to recover $40M from Dubai property sale allegedly funded by firm loan.
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Liquidators of Three Arrows Capital are pursuing a legal claim against Evelyn Tao Yaqiong, the wife of co-founder Zhu Su, seeking to recover $40 million tied to the sale of a Dubai property. According to the case, Zhu allegedly obtained a $50 million cryptocurrency loan from the hedge fund and used it to purchase a villa valued at 110 million dirhams (approximately $30 million), which he then transferred to his wife without compensation.
The transaction occurred roughly three weeks before Three Arrows Capital entered liquidation in June 2022 following the broader crypto market downturn. The timing is significant as Zhu was reportedly serving jail time in Singapore at the moment of transfer for violation of a court order, raising questions about how the transfer was executed and whether proper authorization existed.
The liquidators' recovery effort hinges on establishing that the property sale proceeds constitute recoverable assets belonging to the estate. Key questions remain unresolved, including whether the $50 million loan was documented according to firm policy, whether Zhu possessed authority to execute such transactions during his incarceration, and what legal mechanisms exist to reclaim funds that have already been realized through a real estate sale.