Authorities Apprehend Fugitive Crypto Hedge Fund Co-Founder
Singapore, a hub for cryptocurrency, recently witnessed the arrest of Su Zhu, co-founder of the once-thriving Three Arrows Capital (3AC) hedge fund. Zhu’s arrest came as he attempted to flee the country via Changi Airport, signaling a significant development in the aftermath of 3AC’s spectacular collapse.
Co-Founders Sentenced to Prison
Both Su Zhu and Kyle Davies, the co-founders of 3AC, have been handed four-month prison sentences. This action was taken by the Singaporean authorities, with Teneo, a financial advisory firm handling 3AC’s liquidation, confirming the news. Interestingly, Davies’ current whereabouts remain unknown, raising questions about his role in the fund’s downfall.
Legal Consequences for Zhu
Zhu’s arrest and subsequent sentencing are a result of the Singapore Courts’ decision to hold him accountable for intentionally disregarding court orders. These orders were aimed at compelling him to cooperate with Teneo’s investigation into creditors’ claims and the collapse of 3AC, a multibillion-dollar fund.
Rise and Fall of 3AC
At its zenith in 2022, Three Arrows Capital managed a staggering $10 billion in assets, cementing its reputation as one of the world’s foremost crypto hedge funds. However, a series of unfortunate events, including a sharp decline in cryptocurrency prices and a high-risk trading strategy, led to the fund’s demise. It filed for bankruptcy in mid-2022, setting off a domino effect of bankruptcies throughout the crypto sector.
Search for Davies Continues
While Su Zhu is in custody, the search for Kyle Davies continues. Law enforcement has been directed to locate and apprehend Davies safely so that he can serve his prescribed four-month sentence.
Recovery Efforts by Teneo
Teneo, tasked with the liquidation of 3AC, plans to collaborate with Zhu on issues related to asset recovery. This includes assets belonging to 3AC or acquired using the fund’s resources. The firm has hinted at the possibility of seeking additional court orders if deemed necessary.
Prioritizing Creditor Returns
Throughout the ongoing process, the primary focus of the liquidators has been to recover 3AC’s assets and maximize returns for its creditors. Teneo expressed this commitment in a written statement, highlighting their dedication to the financial recovery of those affected.
Regulatory Action by Monetary Authority of Singapore
Notably, the Monetary Authority of Singapore has imposed a nine-year ban on Su Zhu and Kyle Davies, preventing them from engaging in regulated investment activities. This move underscores the regulatory scrutiny faced by individuals involved in the cryptocurrency sector.
In conclusion, Su Zhu’s arrest in Singapore and the subsequent legal actions mark a significant chapter in the unraveling of Three Arrows Capital. The fallout from 3AC’s collapse continues to reverberate, emphasizing the need for responsible and transparent practices within the crypto industry.