The High Court of Singapore has rejected a plea from the now-defunct cryptocurrency hedge fund, Three Arrows Capital (3AC), to dismiss the lawsuit filed against it by DeFiance Capital.
During a recent hearing, Judge Chua Lee Ming granted DeFiance Capital the green light to proceed with its $140 million dispute against 3AC. Additionally, the court has ordered 3AC to pay SG$15,000 along with legal disbursements to DeFiance Capital.
A former restructuring attorney, known under the pseudonym WassieLawyer, has authored a series of posts on Twitter (referred to as “X” here) explaining the intricacies of the case. WassieLawyer has been collaborating with DeFiance Capital’s founder, Arthur Cheong, on this legal matter.
DeFiance Capital’s Dispute Against 3AC
Over the past year, DeFiance Capital has been embroiled in a dispute with the troubled 3AC, which filed for Chapter 11 bankruptcy on June 30, 2022. The hedge fund contended that the investor’s assets rightfully belonged to 3AC and should be distributed to 3AC’s creditors.
In a recent blog post, Arthur Cheong expressed the strenuous efforts his company had undertaken to convey to 3AC’s liquidators that “DeFiance Capital maintains exclusive, unrestricted control and beneficial ownership over its assets.”
The court’s ruling affirmed that despite Cheong’s assets being hosted on the 3AC platform, he retained independent control over them. In their legal battle against 3AC, DeFiance Capital received unwavering support from the court. According to WassieLawyer, this decision provides much-needed vindication for Cheong.
“We are Delighted”: Cheong
In October 2023, the Court made a significant decision to proceed with the dispute, going against the wishes of 3AC’s liquidators. These liquidators argued that assets held by DeFiance Capital should be included in 3AC’s bankruptcy estate for distribution to its creditors.
During a hearing held last year, the Judge underscored the importance of evidence regarding the control of assets by DeFiance Capital’s founder. Judge Ming also emphasized the location where DeFiance’s assets were situated and the establishment of the Trust in Singapore.
Following the hearing, Cheong took to social media and expressed, “We are delighted that the High Court of Singapore has concurred with our position.” He went on to explain that despite both 3AC and DeFiance Capital being Singapore-based, the liquidators had insisted on resolving the dispute in the British Virgin Islands.
“Our standpoint was that all the critical witnesses and documents are located in Singapore. Therefore, the dispute should rightfully be heard by the Singapore Courts to ensure that all relevant evidence would be readily available,” Cheong pointed out.