Co-founder of 3AC, collapsed crypto hedge fund, arrested in Singapore
Su Zhu, co-founder of the now-defunct crypto hedge fund Three Arrows Capital (3AC), has landed in hot water after being arrested at Singapore's Changi Airport on Friday. He was reportedly attempting to leave the country but had failed to comply with a court order that required his cooperation in the liquidation process of 3AC's assets. Teneo, the liquidation firm handling 3AC's assets, then secured a committal order against Zhu, which led to his arrest and a four-month imprisonment.
Committal order issued for other co-founder too
But Zhu isn't the only one facing legal trouble. Teneo has also obtained a similar committal order for Kyle Davies, the other co-founder of Three Arrows Capital. This order directs Singaporean authorities to arrest and imprison Davies for four months as well. Both co-founders are now dealing with the consequences of their refusal to cooperate with the court-ordered liquidation process of their failed crypto hedge fund.
Three Arrows Capital filed for bankruptcy in 2022
Three Arrows Capital, co-founded by Zhu and Davies, went through a rapid collapse. In July 2022, 3AC also filed for Chapter 15 bankruptcy, which led to Teneo being appointed as the liquidation firm responsible for handling the company's assets. The liquidation process is a legal procedure that aims to distribute a company's remaining assets among its creditors/shareholders. In this case, both Zhu and Davies have reportedly been uncooperative with the court order, resulting in committal orders and potential imprisonment.
Implications for crypto hedge fund industry
The arrest of Zhu and the committal order against Davies serve as a stark reminder of the risks and challenges faced by those involved in the crypto hedge fund industry. As authorities continue to crack down on fraudulent activities and non-compliance within the sector, it is crucial for industry participants to follow legal requirements and maintain transparency in their operations. This case highlights the importance of compliance and cooperation in the ever-evolving world of cryptocurrency investments.
