Last week, there were reports that Su Zhu, the co-founder of the now bankrupt crypto hedge fund Three Arrows Capital (3AC), has been arrested in Singapore. The arrest was officially confirmed by the local police in response to a query from Reuters.
The Singapore Police, in a statement to Reuters, revealed that a “36-year-old man” was arrested on September 29 at Changi Airport in relation to the collapse of 3AC. The hedge fund filed for bankruptcy in mid-2022 following the significant drop in cryptocurrency prices. The arrested individual was seemingly attempting to flee.
Although Reuters sought further details on Su Zhu’s arrest, the police have chosen not to disclose his identity or provide any additional information related to the arrest. However, it is evident that the police are referring to Su Zhu, who celebrated his 36th birthday in April 2023.
The Legal Consequences
Teneo, the liquidator of the fund, disclosed that both Su Zhu and co-founder Kyle Davies have been sentenced to a four-month prison term. However, Kyle Davies’ whereabouts are currently unknown. Su Zhu was found guilty of willfully disobeying court orders, which mandated his cooperation with Teneo’s investigation into creditors’ claims and the fund’s collapse.
The Collapse and Its Ramifications
The collapse of 3AC had a significant impact on the cryptocurrency industry. It resulted in the loss of savings for many investors and even led to the bankruptcy of other companies like Voyager Digital.
According to Teneo, the fund became insolvent in early May 2022, even before the news of its collapse became widely reported. This revelation was made in the first-year update to creditors during the liquidation proceedings.
