Su Zhu, a co-founder of Three Arrows Capital, a cryptocurrency hedge fund that faced collapse last year, has been arrested in Singapore. The arrest comes after a Singaporean court issued “committal” orders for Su Zhu and another Three Arrows founder, Kyle Davies, sentencing both to four months in prison for failing to cooperate with the liquidators investigating their failed hedge fund. Currently, Kyle Davies’s location is unknown.
Last summer, Three Arrows Capital, based in Singapore and managing $4 billion at its peak, filed for bankruptcy amid the cryptocurrency market meltdown. The fund’s collapse had widespread implications, impacting not only the fund itself but also dragging down a significant portion of the cryptocurrency industry. Many amateur investors lost their savings, and several other companies went bankrupt as a result of the ensuing crisis.
Su Zhu’s arrest marks the latest in a series of crypto executives being apprehended in the aftermath of last year’s crypto market crash. In December, Sam Bankman-Fried, the founder of the crypto exchange FTX, was arrested in the Bahamas and charged with orchestrating a massive fraud involving his company. His criminal trial commenced in a federal court in Manhattan. In March, Do Kwon, the founder of the crypto firm Terraform Labs, was arrested in Podgorica, the capital of Montenegro, as he attempted to board a private flight to Dubai, UAE, along with a travel companion. He, too, faces fraud charges.
As of now, a lawyer for Su Zhu has not provided any comments on the situation. Teneo, the firm responsible for the fund’s liquidation, stated it would “pursue all opportunities” to ensure Su Zhu complies fully with the court order, which requires him to provide information and documents related to Three Arrows during his imprisonment.
Following Three Arrows’ collapse, Su Zhu and Kyle Davies denied any wrongdoing and embarked on personal ventures. Davies traveled to Spain, Bali, and other destinations, while Su Zhu played video games and worked as a surf instructor. In April, they launched a new business called Open Exchange, which serves as a marketplace for investors who suffered losses during last year’s cryptocurrency market downturn.
Additionally, the Monetary Authority of Singapore, a regulatory body that reprimanded Three Arrows last June, has banned Su Zhu and Kyle Davies from engaging in regulated investment activities for nine years, effective from September 13th, according to the liquidators.
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