The 3AC founders will be found in contempt of court if they fail to reply to the order.

Three Arrows Capital (3AC) founders Kyle Davies and Su Zhu have been ordered to attend court in the British Virgin Islands on Dec. 19 as part of the liquidation proceedings for the crypto hedge fund, which collapsed last year.

The 3AC founders will be found in contempt of court if they fail to reply to the order.

Kyle Davies and Su Zhu are required to provide liquidators with all documents relevant to the firms’ bankruptcy by April 14.

3AC imploded last June as a depressed crypto market exposed the firm’s long-only trading strategy. The 3AC estimated its assets to stand at around $1 billion compared to liabilities of $3 billion.

The collapse was one of the flashpoints in the onset of a crypto winter, bringing about similar collapses from multiple other crypto firms. Companies with 3AC exposure such as Voyager Digital, Celsius and Genesis Asia Pacific (which, like CoinDesk, is part of the Digital Currency Group) subsequently filed for bankruptcy.

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The bankrupt crypto hedge fund once aimed for a $100M NFT collection, which now may be worth less than $1M.

Starry Night Capital, a fund backed by bankrupt crypto hedge fund Three Arrows Capital, had its non-fungible tokens (NFT) moved to smart contract wallet Gnosis Safe, according to Nansen.ai.

Starry Night was set up by the doomed Singapore-based firm in August 2021 to act as an investment arm for digital collectibles following the early NFT boom. The fund partnered with well-known NFT collector Vincent Van Dough to assemble “the world’s finest collection of CryptoArt,” according to its now-defunct Twitter account. The fund’s website has also since been pulled.

CoinDesk reported last year that Three Arrows’ NFT wallets initially swooped up assets from popular collections like CryptoPunks and invested in multimillion-dollar artworks from artists including Dmitri Cherniak, with the goal of raising $100 million. In addition, the firm planned to launch an NFT educational portal and physical gallery.

Ultimately, Starry Night Capital moved its entire collection of 70 works onto NFT marketplace SuperRare, according to CoinMetrics researcher Kyle Waters, ahead of its June 2022 liquidation order. At the time, it was estimated to have spent more than $21 million building the collection.

According to Nansen.ai, NFTs previously collected by Starry Night have since been moved to a Gnosis Safe address, including a Pepe the Frog NFT Genesis, which sold in October 2021 for about $3.5 million; a Fidenza, which sold for about $1.1 million in November 2021; and several CryptoArt NFTs by XCOPY that sold at multiple points last year for around $5.5 million, among others.

The shifting of these assets into a Gnosis Safe is significant, given that the smart contract digital asset management platform requires multiple signatures to move assets – meaning, multiple team members need to approve each transaction in order for it to be executed. This method is helpful for companies that may have multiple owners of a digital portfolio and prevents any single party from running off with the funds inside.

As noted by CoinDesk’s Sam Reynolds, it’s difficult to value all of the NFTs in the Starry Night safe because different valuation tools use different metrics in their estimations. According to Nansen.ai, the portfolio of NFTs is worth about 625 ether (ETH), or about $846,431. In addition, it notes that about 89% of the NFTs in the collection have low liquidity, which it measures as less than 35 sales in the last seven days.

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