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Authorities have apprehended Su Zhu, a co-founder of the bankrupt digital asset hedge fund Three Arrows Capital, who was attempting to flee Singapore.
Liquidators overseeing the bankruptcy estate of 3AC, the collapsed fund, announced on Friday that Zhu was arrested at Changi Airport in Singapore while trying to leave the country.
Zhu and co-founder Kyle Davies have both been sentenced to four months in prison, according to Teneo, the financial advisory firm managing 3AC’s liquidation. Davies’ whereabouts are currently unknown.
The Singapore Courts ruled against Zhu for intentionally failing to comply with court orders to cooperate with Teneo’s investigation into creditors’ claims and the collapse of the multibillion-dollar fund.
At its peak in 2022, 3AC managed approximately $10 billion in assets, cementing its position as one of the most prominent crypto hedge funds globally. However, the firm filed for bankruptcy in mid-2022 due to a combination of the decline in cryptocurrency prices and a high-risk trading strategy that wiped out its assets and left it unable to repay lenders. The collapse of 3AC triggered a wave of bankruptcies across the sector.
Davies, who is still at large, also faces a commitment order from the court. The police have been instructed to arrest Davies and bring him in “safely” to serve his four-month sentence.
While Zhu is in custody, Teneo announced that it will collaborate with him on matters related to 3AC, with a focus on recovering assets that belong to 3AC or were acquired using the fund’s funds. The firm may seek additional court orders against him as well.
Teneo stated, “Throughout the process, the liquidators’ priority has been to recover 3AC’s assets and maximize returns for its creditors.”
In January, Davies and Zhu reportedly attempted to attract investors for a distressed debt marketplace called GTX, which aimed to capitalize on industry bankruptcies.
The Monetary Authority of Singapore, responsible for regulating investment activities, has banned the co-founders from engaging in regulated investment activity for nine years, as reported by Teneo.
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