Crypto Hedge Fund founders bought a $ 50 million yacht before going bankrupt

Although cryptocurrency is polarizing, there is one thing everyone can agree on: It is volatile. Valuations reach rapidly dizzying heights, but can just as quickly be pulverized into the ground. An example of that division is Three Arrows Capital, a Singapore-based hedge fund that filed for bankruptcy on July 1.

Three Arrows Capital was ordered to liquidate its assets by a court in the British Virgin Islands late last month after they were sued for failing to repay the debt. But before the pain caused by the start of the crypto winter, as revealed through documents from the Singapore Supreme Court, released on Monday, 3AC founders Su Zhu and Kyle Davies made an advance payment on a yacht of 50 million dollars.

It was speculated in the submission that the advance payment was paid with borrowed funds. Three Arrows Capital was contacted for comment, but did not respond immediately.

The revelation was made through Charles McGarraugh, the head of strategy for Blockchain.com, as court documents reveal that 3AC owes $ 302 million. McGarraugh said in a statement that he was concerned about Zhu and Davies’ extravagant purchase.

“For example, after information and belief, I understand that Messrs. Zhu and Davies have allegedly paid a down payment on a yacht of $ 50 million,” he wrote to the Singapore High Court. “It is also my understanding that Mr. Davies intends this yacht to be larger than any yacht owned even by Singapore’s richest billionaires.”

McGarraugh also pointed to a $ 35 million home Zhu bought in Singapore in December last year.

The overall revelation from the lawsuit has been that 3AC owes $ 3.5 billion to 27 different cryptocurrencies. Much of this – $ 2.36 billion – is due to just one, Genesis. The statements were submitted on July 7, but were published on Monday by the company that monitors 3AC’s liquidation, Teneo.

Three Arrows Capital was hit hard by the collapse of luna and its associated terraUSD stablecoin. When terraUSD was released, it led to the deletion of $ 14 billion from the market. Three Arrows Capital had invested $ 200 million in terra and was unable to repay creditors as a result of these losses. Voyager Digital is one of the companies that 3AC owed money to – Voyager borrowed 3AC $ 650 million in crypto back in March – and has filed for bankruptcy since the collapse of 3AC.

Three Arrows Capital managed a fund estimated to be worth $ 10 billion back in March, Fortune reported