The document, prepared by 3AC liquidator Teneo and sent to the fund's creditors on Thursday, states that the assets include fiat money, tokens, NFTs, and venture and other investments. It also notes that the value of the assets will change significantly, either positively or negatively, due to the volatile nature of crypto.
"Due to volatility in the crypto market generally, together with the substantial number of illiquid investments held by the company, it is presently uncertain what level of recoveries will be made during the course of the liquidation," wrote Teneo in the document.
The estimated assets are worth far less than 3AC's liabilities, which stand at over $3 billion.
Breaking down the assets, fiat holdings were estimated to be worth $37 million, tokens around $238 million, NFTs around $22 million, and venture and other investments $502 million, per the document. The total value of the assets also includes 3AC's sub-portfolio funds, DeFiance Capital and Starry Night Capital, which are worth a total of around $217 million.
3AC also has a small sub-portfolio fund called Warbler, which "itself did not hold any assets but rather loaned all funds to or invested all funds within 3AC," according to the document.
Teneo has begun taking control of 3AC's assets, including fiat and tokens, as The Block reported earlier this month. Thursday's deck details the asset realization process. It notes that Teneo has taken into custody 3AC's Aptos and StarkWare tokens.
"The value of the Aptos tokens is USD 31.7 million based on 14 December 2022 prices; the value of the StarkNet tokens is not yet determinable although 134.2 million tokens are under the [joint liquidators] control," according to the document. The joint liquidators of Teneo are Christopher Farmer J and Russell Crumpler.
Overall, Teneo has recovered assets worth a total of around $72 million, but excluding its fees and other expenses, the net value of the recovered assets stands at around $64 million, per the document.
3AC, once one of the largest and best-known crypto hedge funds, collapsed amid liquidity troubles in mid-June. The fund filed for Chapter 15 bankruptcy in New York on July 1.
Teneo also detailed its efforts to contact 3AC founders Kyle Davies and Su Zhu in the document. Its last call with either of the founders came in August, and the liquidator has since tried to force their cooperation through legal applications in New York, The British Virgin Islands, and, most recently, in Singapore — where it obtained an order from the Singapore Court granting discovery against the co-founders.
Davies and Zhu were largely silent on social media for a period of a few months after 3AC's collapse in the summer but began tweeting in earnest as things began to unravel for FTX.
Teneo noted in the document that "whilst the founders have been reticent to engage directly, they have continued to provide extensive media interviews and have been very active and responsive to comments via Twitter, predominantly with respect to the collapse of FTX."
Teneo said it would be "prepared to travel to meet with the founders at a mutually convenient date and location — whilst the [joint liquidators] should not have to go to such lengths they would nevertheless be happy to do so to help ensure that returns for the unsecured creditors are maximized."
The liquidator said that Davies and Zhu are believed to be in "Bali, Indonesia and/or UAE," adding that the pair "engaged forensic security experts in June 2022 to, among other things, establish secure communications between designated individuals that could be deleted."
In a separate section of the document, Teneo stated that, in the absence of "meaningful cooperation," it has engaged "digital asset investigations specialists to prepare a comprehensive report with respect to all of the company's on-chain activities in the months prior to liquidation."
The findings will be made available to Teneo shortly and, according to the document, "almost certainly impact strategy with respect to potential claims going forward."