The co-founder of now-defunct hedge fund Three Arrows, Su Zhu, has been slapped with a four-month jail term after being apprehended at an airport in Singapore on Friday while attempting to flee the country. The news was revealed by the firm’s court-appointed joint liquidator, Teneo.
Su Zhu Arrested
Three Arrows co-founder Su Zhu was arrested at Changi Airport in Singapore while trying to travel out of the country on Friday afternoon.
Zhu was subsequently sentenced to four months in prison by a Singaporean court. The arrest follows a committal order due to failure to comply with a court directive. 3AC’s liquidator Teneo was granted its committal request in Singapore on September 25 after Zhu refused to comply with a previous court order requiring him to cooperate with ongoing liquidation investigations and account for his activities related to the failed hedge fund.
According to Teneo, a similar committal order was granted against Zhu’s business partner Kyle Davies. Davies, however, remains underground as his current whereabouts are unknown.
With Zhu starting his sentence, the liquidators plan to focus on “the recovery of assets that are either the property of 3AC or that have been acquired using 3AC’s funds.”
Downfall
Three Arrows Capital went bust in 2022 following the tragedy of the Terra ecosystem. The venture fund, which at one point had over $10 billion under its management, had excessive leverage on long positions across various crypto assets and borrowed hundreds of millions of dollars — eventually filing for bankruptcy in July last year. After its collapse, the founders defaulted on loans and went into hiding, prompting legal pursuit.
Notably, Zhu and Davies established a new exchange dubbed Open Exchange (OPNX) for traders to more easily exchange bankruptcy claims for other fallen crypto firms in 2022, such as crypto exchange FTX. In May, the pair was issued with a written reprimand by Dubai’s Assets Regulatory Authority (VARA) for operating their new venture.
Earlier this month, the Monetary Authority of Singapore (MAS) barred the two 3AC co-founders from conducting financial activity in the island city-state for nine years each.
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- Source: https://zycrypto.com/three-arrows-co-founder-su-zhu-arrested-in-singapore-gets-4-month-jail-sentence/
