Singapore just rolled out the red carpet for a legal dispute between a bankrupt blockchain-based hedge fund, Three Arrows Capital’s (3AC), and an investment firm of its origin, DeFiance Capital. The controversy circulates around the assets held by DeFiance Capital; which according to 3AC liquidators should be integrated within the 3AC bankruptcy estate for distribution to its creditors. On the contrary, DeFiance holds a steadfast belief that the assets must remain separate and redistributed to its investors.
The augments eventually met their destiny on August 8, when Judge Chua Lee Ming of Singapore ruled in favor of DeFiance’s stand by deciding to hear the case in Singapore. This decision takes into account various variables including the location of DeFiance’s crypto assets and the origination of the trust in Singapore. DeFiance Capital founder Arthur Cheong‘s command over the fund was also an influencing factor in the ruling.
There’s jubilation among DeFiance and Cheong as they view this outcome as a positive reinforcement for their case argument. A social media post by Cheong revealed high optimism stating, ‘the High Court of Singapore – agrees with us that Singapore is more suitable for hearing this dispute.’
However, this legal knot may not unravel easily, as the same disagreement is under conversation in the British Virgin Islands (BVI) which could lead to concurrent proceedings and possibly inconsistent rulings in both jurisdictions.
The contentious assets are claimed to be a $141 million treasure by the liquidators while DeFiance approximates it around $120 million, encompassing cryptocurrencies, non-fungible tokens (NFTs), and SAFE/SAFT contracts. This schism emerged when the founders of 3AC shifted legal rights and assets from DeFiance leading to a discrepancy over these holdings propriety.
Interestingly, Cheong seems to be unaffected by the legal hurdles and continues to rally the crowd for his new enterprise, the DeFiance Liquid Venture Fund, which is aimed at investing in liquid tokens. As much as the whole case underscores the perpetual regulatory ambiguity associated with blockchain technology, it also illuminates the firm emphasis players like DeFiance Capital are putting into maintaining the interests of their investors, amplifying both the risk and enthusiasm in this highly volatile market.
Source: Cryptonews
