First Mover Asia: It Won't Be Easy for Creditors to Untangle Three Arrows Case, Singapore Lawyer Says

The fallout continues from the crypto industry's slump, with fresh filings from Celsius, layoffs at OpenSea and a short squeeze in Voyager's tokens. PLUS: We talked to a Singapore-based lawyer about the Gordian knot that is the Three Arrows bankruptcy case.

AccessTimeIconJul 14, 2022 at 11:46 p.m. UTC
Updated Apr 14, 2024 at 10:46 p.m. UTC

Good morning. Here’s what’s happening:

Prices: Bitcoin rises alongside U.S. stocks.

Insights: Yuankai Lin, a partner at RPC Singapore, a global law firm, tells CoinDesk's Sam Reynolds that Three Arrows’ creditors are going to face an uphill battle.

Today's First Mover Asia newsletter was edited by Bradley Keoun and produced by Greg Ahlstrand.


Bitcoin (BTC): $20,579 +2.1%

Ether (ETH): $1,193 +7.4%

S&P 500 daily close: 3,790.38 −0.3%

Gold: $1,709 per troy ounce −1.4%

Ten-year Treasury yield daily close: 2.96% +0.06

Bitcoin, ether and gold prices are taken at approximately 4pm New York time. Bitcoin is the CoinDesk Bitcoin Price Index (XBX); Ether is the CoinDesk Ether Price Index (ETX); Gold is the COMEX spot price. Information about CoinDesk Indices can be found at

Bitcoin (BTC) rose for a second day, remaining comfortably around $20,500.

The largest cryptocurrency by market capitalization gained during the U.S. session along with stocks, rising as traders tempered bets the Federal Reserve will raise interest rates by a full percentage point – considered extreme – at a meeting later this month. Higher interest rates theoretically should make high-risk assets like cryptocurrencies and stocks less attractive as investments, so crypto traders are following the economic data closely.

"We are still constructive on crypto-asset prices in [the second half] but likely have some residual macro murkiness to navigate through in the near term," Sean Farrell, vice president for digital-asset strategy at Fundstrat, wrote Thursday.

The fallout continued from the industry's first-half slump, with bitcoin still trading at less than a third of the all-time high price around $69,000 reached in late 2021.

A day after the troubled crypto lender Celsius Network filed for bankruptcy protection in the U.S., the firm filed court documents acknowledging a $1.2 billion hold in its balance sheet. CoinDesk also reported that Celsius' mining unit last month auctioned off thousands of newly purchased mining computers, and prices for the "rigs," as they're known, have slumped to near two-year lows.

The non-fungible token (NFT) trading platform OpenSea laid off roughly 20% of its staff. CEO Devin Finzer cited an “unprecedented combination of crypto winter and broad macroeconomic instability.”

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Three Arrows’ Creditors Face a Tough Fight Against TPS Capital and Three Arrows Singapore, says Singapore Lawyer

By Sam Reynolds

Three Arrows’ bankruptcy case looks to be on track before a U.S. court in New York, and one question on everyone’s mind will be the value of its assets. Co-founders Su Zhu and Kyle Davies have been ordered to compile a list of the cash and crypto the company has access to, but there’s also the question of related entities.

As Three Arrows Capital cratered under the immense pressure of one of the sharpest crypto declines in history, its over-the-counter trading desk, Tai Ping Shan (TPS) Capital, kept on trading. While the company was once described on LinkedIn as "the official OTC desk of Three Arrows Capital," it has since changed the language to distance the two firms and has publicly claimed its “independence” from Three Arrows.

A CoinDesk investigation found that despite the earlier language on the front end (still preserved by Google) claiming a relationship, on the back end there is a concerted effort to create a legal firewall between the two companies through a constellation of registered companies in Singapore, the British Virgin Islands and the Cayman Islands.

Yuankai Lin, a partner at RPC Singapore, a global law firm, told CoinDesk that Three Arrows’ creditors are going to face an uphill battle.

Lin said their case will depend on whether a court can be convinced that Three Arrows and TPS Capital were managed as a “functional whole.”

“Creditors will have to show that TPS Capital and [Three Arrows] are not truly independent from each other and that the directing mind behind TPS Capital is in fact” Three Arrows, Lin said to CoinDesk via email. “They will have to present that the separate ownership of the companies is a facade designed to evade legal obligations or to conceal the true state of affairs.”

Courts will decide

Even if creditors were able to prove that TPS Capital is an effective subsidiary of Three Arrows — Lin said that "in substance, TPS Capital is effectively a subsidiary of Three Arrows" — that might not be enough to win a case.

"A holding company is legally entitled to set up subsidiaries in order to minimize its liabilities. Creditors will need to show that [Three Arrows] and TPS Capital were managed as a functional whole,” Lin said.

On the topic of controlling minds and functional wholes, it should be noted the firm being liquidated is Three Arrows Capital’s British Virgin Islands entity.

Filings from Singapore’s corporate registrar show the firm's shares are held by Zhu and Davies entirely. Three Arrows is thought to control significant assets, considering that documentation from the U.S. Securities and Exchange Commission shows it split its nearly $1 billion (in January 2021 value) Grayscale Bitcoin Trust purchase between the Singapore and BVI entities. (Digital Currency Group is the parent company of Grayscale and CoinDesk.)

Lin said that in order for the liquidators, and thus creditors of Three Arrows BVI, to get their hands on Three Arrows’ Singapore assets, there would need to be a determination by the court that the Singapore entity is a subsidiary — thus an asset — of the BVI corporation.

Lifting the corporate veil

“The starting position is that Three Arrows Singapore is not an asset of Three Arrows BVI or U.S., and the bankruptcy proceedings in the U.S. and liquidation proceedings in the BVI will not affect Three Arrows Singapore,” Lin said. “There is a possibility that the liquidators, having looked deeper into the parent company, may seek a ruling from the court to lift the corporate veil and to look at the directing mind(s) behind Three Arrows Singapore.”

One outcome, according to Lin, is the court may find that the separate ownership of the companies is a facade designed to evade legal obligations or to conceal the true state of affairs. If that’s the case, a court could rule that Three Arrows Singapore was “in substance a subsidiary.”

“To the Singapore courts, how the relationship [among the BVI, U.S., and Singapore entities] is described on the companies’ website or publicity materials would not matter,” Lin said. “The real test is of the actual relationship between the entities, and the court will consider whether there is real evidence that Three Arrows Singapore is in actuality a subsidiary.”

Alternatively, the court might consider whether all the entities are in effect being controlled by the same parties and were “alter egos of this same controlling mind.”

Lin noted that prior jurisprudence in Singapore on this topic will likely work in Three Arrows’ favor.

“It should be noted that cases of the corporate veil being lifted are few and far between as the courts are generally very respectful of the separate legal personality doctrine,” he concluded.

CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:

Bitcoin, Crypto Markets Turn Red Upon News of US Inflation Hitting 9.1%, Legal Ramifications of NFT-backed Loans: U.S. economy recorded 9.1% inflation in June, a new 40-year high. Will policy makers look for even more aggressive measures to tame inflation, and how would this affect crypto markets? Plus, Jeff Karas, lawyer at Anderson Kill, discusses the complexity and risks of using NFTs as collateral for secure loans. And Aaron Selenica, a college student who lost money trading on the now bankrupt Voyager Digital, shares his story.


Longer reads

What Legacy Brands Can Learn From Web3’s Hyper-Cultish Narratives: Traditional companies can ape how blockchain projects build loyalty and community, says one strategist.

Today's crypto explainer: What Are NFTs and How Do They Work?: NFTs are crypto assets that grant gamers and collectors ownership over their digital items.


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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Bradley Keoun

Bradley Keoun is the managing editor of CoinDesk's Tech & Protocols team. He owns less than $1,000 each of several cryptocurrencies.