Co-founder of 3AC, Su Zhu, Arrested in Singapore Over Bankruptcy Contempt

5:17 pm
September 29, 2023
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The co-founder of Three Arrows Capital (3AC), Su Zhu, has been arrested in Singapore while attempting to leave the country. The arrest follows a committal order against Zhu by the Singapore Courts for contempt of court, according to a statement from Teneo, the joint liquidator of the bankrupt hedge fund.

Teneo was granted a committal request on September 25, claiming that Zhu had failed to comply with a court order. The investigation is related to efforts to recover funds for creditors of 3AC, which collapsed in 2022 after the Terra ecosystem’s implosion. The hedge fund had significant leverage on long positions in certain cryptocurrencies and had borrowed hundreds of millions of dollars from a crypto lending protocol.

Zhu and Kyle Davies, the co-founders of 3AC, have been evading liquidators since the fund’s failure. However, they have remained very active on social media. Zhu has been sentenced to four months’ imprisonment under the committal order, and a similar order has been granted against Davies.

The liquidators will use Zhu’s prison term to engage with him regarding the recovery of assets belonging to 3AC or acquired using the fund’s funds. They will also seek his compliance with the court order during and after his imprisonment, and may apply for further court orders if necessary.

The whereabouts of Davies are currently unknown. The Monetary Authority of Singapore has banned Zhu and Davies from conducting regulated investment activities for nine years each.

Summary

Su Zhu, the co-founder of Three Arrows Capital (3AC), has been arrested in Singapore for contempt of court following a committal order. The arrest is part of an investigation into the recovery of funds for creditors of 3AC, which collapsed in 2022. Zhu has been sentenced to four months’ imprisonment, and his co-founder Kyle Davies remains at large.

FAQs

1. Why was Su Zhu arrested in Singapore?

Su Zhu, co-founder of Three Arrows Capital (3AC), was arrested in Singapore for contempt of court. The arrest followed a committal order issued by the Singapore Courts after Zhu failed to comply with a court order related to the investigation into the recovery of funds for 3AC’s creditors.

2. What is the reason behind the investigation into 3AC?

The investigation is focused on recovering funds for creditors of Three Arrows Capital (3AC) after the collapse of the hedge fund in 2022. 3AC had large amounts of leverage on long positions in certain cryptocurrencies and had borrowed significant sums from a crypto lending protocol.

3. What will happen to Su Zhu during his imprisonment?

During his four-month imprisonment, Su Zhu will be engaged by the liquidators to discuss matters related to 3AC and the recovery of assets belonging to the fund or acquired using its funds. The liquidators will also ensure Zhu’s compliance with the court order for the provision of information and documents. Further court orders may be sought if necessary.

4. What is the status of Kyle Davies, the other co-founder of 3AC?

Kyle Davies, the co-founder of Three Arrows Capital (3AC), is currently at large. His whereabouts are unknown, and he is wanted by the liquidators in relation to the investigation and recovery efforts.


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