Su Zhu, co-founder of the now-defunct crypto hedge fund Three Arrows Capital (3AC), has been apprehended by authorities at Singapore Changi Airport. The arrest comes after several months of eluding law enforcement. The liquidators overseeing the collapsed hedge fund recently announced the arrest of Su Zhu, who was attempting to leave the country.
The arrest of Su Zhu occurred approximately nine months after he 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 launch a distressed debt marketplace within the crypto space.
Teneo, the financial advisory firm overseeing the liquidation of 3AC, reported that Su Zhu was apprehended at Changi Airport while attempting to travel out of Singapore following a committal order granted by the Singapore Courts against him. Teneo had requested the committal order, 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.
Three Arrows Capital (3AC) collapsed in 2022 due to issues in the Terra ecosystem, excessive leverage on long cryptocurrency positions, and borrowing substantial amounts from a crypto lending protocol. Since the fund’s collapse, both Su Zhu and Kyle Davies have evaded liquidators but remained active on social media.
Su Zhu has been sentenced to four months of imprisonment under the committal order. Teneo stated that during his imprisonment, they will seek to engage with him on matters relating to 3AC and the recovery of assets. The whereabouts of Kyle Davies, the other co-founder, are currently unknown.
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. Three Arrows Capital, once valued at $10 billion, filed for bankruptcy in July 2022, causing a ripple effect in the crypto market.
The liquidators of 3AC will continue to pursue opportunities to ensure Su Zhu complies with the court order and provide information and documents relating to 3AC and its former investment manager. Teneo may make further court applications as required.
Three Arrows Capital is a Singapore-based hedge fund manager founded in 2012 by Su Zhu and Kyle Davies. The firm is now planning to sell its assets, including holdings in crypto startups.