Cofounder of bankrupt crypto hedge fund Three Arrows Capital arrested trying to flee Singapore
Su Zhu, a cofounder of the bankrupt crypto hedge fund Three Arrows Capital, was apprehended by authorities at Singapore Changi Airport as he tried to flee the country on Friday, according to the company’s joint liquidators.
He reportedly was arrested in accordance with a committal order granted to the liquidators. Zhu allegedly refused to comply with a court order that compelled him to cooperate with their investigation and account for his activities at 3AC, according to a statement from the liquidators.
https://t.co/tYqu9VWeVU pic.twitter.com/hd8eTdzbvY
— db (@tier10k) September 29, 2023
Zhu is set to be imprisoned for four months, according to the statement, and during that time the liquidators said they’ll try to work with him to help recover 3AC assets still owed to creditors.
A similar court order also was granted in Singapore for the arrest of Zhu’s 3AC cofounder, Kyle Davies.
The $4 billion hedge fund filed for Chapter 15 bankruptcy in June 2022 following the collapse of Terraform Labs’ TerraUSD stablecoin and sister cryptocurrency Luna, which the firm had invested in and helped support.
The company’s liquidators at the consulting and advisory firm Teneo have sought to recover $3.3 billion for the company’s creditors since the bankruptcy was announced last year. The liquidators are seeking $1.3 billion personally from Zhu and Davies, Bloomberg reported, based on debts that the cofounders reportedly racked up for the company in the months leading up to the bankruptcy.
Earlier this month, Singapore’s financial regulator, the Monetary Authority of Singapore, banned Zhu and Davies from participating in the country’s regulated financial industry for nine years. That ban includes serving as a director, a majority shareholder, or in the management of any capital market services firm, according to Coindesk. The pair had previously been working on a new venture called OPNX, a crypto exchange meant to allow customers to trade bankruptcy claims.
Since their hedge fund collapsed, Zhu and Davies have shown little remorse for their actions and, at least for a time, were enjoying the slow life in Bali, according to a June profile by the New York Times.