The High Court of Singapore has rejected Three Arrows Capital’s attempt to dismiss a lawsuit filed by DeFiance Capital founder Arthur Cheong, allowing DeFiance Capital to pursue legal action against the bankrupt crypto hedge fund’s estate. Cheong contends that investors in DeFiance Capital are the true owners of assets held in trust by 3AC and that these assets should not be used to settle creditor claims against 3AC. The court’s decision, which recognizes the crypto assets as being in trust, underscores the legal intricacies surrounding cryptocurrency ownership and control, setting potential precedents for future disputes in the industry. This development emphasizes the importance of clear legal structures in navigating crypto fund bankruptcies and highlights evolving regulatory and legal frameworks for digital assets.
