Rumors that Su Zhu, the co-founder of the collapsed and bankrupt crypto hedge fund Three Arrows Capital (3AC), was arrested in Singapore due to his non-compliance with a Singapore court were confirmed. He was ordered to cooperate in the liquidation investigation, which he didn’t. Thus, Zhu has been sentenced to a four-month prison term. 3AC was part of the crypto hype between 2020 and 2021 before it collapsed, like many others.
The Sunken Crypto Heroes
Three Arrows Capital (3AC) was one of the big stars in the last crypto hype, along with Terra-Luna, FTX, Celsius, and Voyager. All of which are now defunct and on trial. 3AC reportedly managed assets worth $10 billion at its peak. The fund declared bankruptcy in July 2022, a few months after the crypto market was destabilized by the Terra-Luna ecosystem’s collapse. The fund’s outstanding debts to creditors were estimated at $3.5 billion.
The two 3AC founders Su Zhu and Kyle Davies, were friends who met at an elite Massachusetts private school before going on to the Ivy League, They were regarded as “genius” cryptocurrency investors who made bold, bullish predictions. At the height of 3AC’s success on the back of soaring bitcoin prices in 2021, the pair ordered a superyacht they planned to call Much Wow.
According to EdgeProp, from 2019 to 2021, Zhu purchased three bungalows in Singapore in his own name and that of his wife, Tao Yaqiong. The purchases totaled $83.55 million.
The Singapore authorities are also seeking to arrest Davies, “but his whereabouts remain unknown at this point in time,” Teneo said.
Once boasting a net worth exceeding S$1 billion, Zhu’s fortunes took a turn with 3AC‘s collapse, culminating in his recent arrest.
Lost And Gone
Teneo, a financial advisory firm controlling the liquidation and management of affairs for the defunct crypto hedge fund, has consistently expressed frustration over the lack of cooperation from Zhu and Davies. Efforts to subpoena the duo even extended to social media platforms. Recent reports suggest that Teneo is seeking to recover $1.3 billion from Davies and Zhu, alleging their responsibility for the fund’s losses.
Last year, an attorney representing the liquidators pointed out that Zhu and Davies consistently evaded providing essential documents and information for the probe. On one occasion, they missed a liquidation hearing, with one of them seemingly posting tweets from a boat in Dubai, as noted by a senior Teneo official overseeing the liquidation.
Additionally, the Monetary Authority of Singapore (MAS) reprimanded 3AC for providing inaccurate information and violating fund management licensing rules.
More Sunken Crypto Heroes
Post the fund’s collapse, Zhu sold several of his properties and assets. Reports suggest that Zhu and Davies spent time in Bali, Indonesia, following their company’s downfall, with Zhu immersing himself in activities like video gaming and surfing. The crypto industry has seen several of its prominent figures face legal challenges recently. Notably, Do Kwon, associated with the crypto project Luna, was arrested in Montenegro, and Sam Bankman-Fried (SBF), co-founder and former CEO of FTX, is in prison and stands trial in Manhattan.
