Three Arrows Capital (3AC) co-founder Su Zhu arrested in Singapore airport, sentenced to 4 months in prison
After several months of eluding law enforcement, Su Zhu, co-founder of the now-defunct crypto hedge fund Three Arrows Capital (3AC), has been apprehended by authorities. The liquidators overseeing the collapsed crypto hedge fund recently announced that Su Zhu was arrested at Singapore Changi Airport while attempting to leave the country.
The news of his arrest came approximately nine months after Zhu and his co-founder, Kyle Davies, revealed their new venture called GTX. They were seeking to raise a $25 million seed round from investors to capitalize on the increasing number of bankruptcies in the crypto sector. Their venture, GTX, was designed to launch a distressed debt marketplace within the crypto space.
Meanwhile, Teneo, the financial advisory firm overseeing the liquidation of 3AC, said Zhu “was apprehended at Changi Airport whilst attempting to travel out of Singapore following a committal order granted by the Singapore Courts against him.“
Before his arrest, Teneo had requested a committal order which is used to send individuals to prison for contempt of court. Then on September 25, Teneo was granted the request in Singapore, alleging Zhu’s failure “to comply with a court order“ related to the investigation into the recovery of funds for creditors of the collapsed hedge fund, Cointelegraph reported.
Three Arrows Capital (3AC) collapsed in 2022 due to issues in the Terra ecosystem, having excessive leverage on long cryptocurrency positions, and borrowing substantial amounts from a crypto lending protocol.
Since the fund’s collapse, Zhu and Kyle Davies, the co-founders, have evaded liquidators but remained active on social media. Both Zhu and Davies received similar committal orders, with Zhu sentenced to four months of imprisonment. In a statement, Teneo said:
“As a result, Mr Zhu will be held in prison to serve his sentence of 4 months under the committal order, during which time the liquidators will seek to engage with him on matters relating to 3AC, focusing on the recovery of assets that are either the property of 3AC or that have been acquired using 3AC’s funds. The liquidators will pursue all opportunities to ensure Mr Zhu complies in full with the court order made against him for provision of information and documents relating to 3AC and its former investment manager during the course of his imprisonment and thereafter, and may make applications for further court orders as required.“
Teneo also reported that the whereabouts of Kyle Davies, one of the co-founders, are currently unknown. Additionally, the Monetary Authority of Singapore has imposed a nine-year ban on both Su Zhu and Kyle Davies, preventing them from engaging in regulated investment activities.
Once valued at $10 billion, the Singapore-based cryptocurrency hedge fund filed for bankruptcy in July. Three Arrows’ margin call rippled through the entire crypto market last year. One of the affected crypto companies is crypto lender BlockFi, which recently announced that it has liquidated its position in Three Arrows.
Founded in 2012 by Su Zhu and Kyle Davies, Three Arrows Capital is a hedge fund manager that provides risk-adjusted returns. The firm is headquartered in Singapore. Three Arrows is now planning to sell its asset including holdings in crypto startups.