Key Takeaways
- • Su Zhu, co-founder of collapsed crypto hedge fund Three Arrows Capital, was arrested at Changi Airport in Singapore on Friday while attempting to leave the country, according to the fund's liquidators.
- • A Singaporean court had issued committal orders on Monday sentencing Zhu and co-founder Kyle Davies to four months in prison for failing to cooperate with liquidators.
- • Three Arrows, which managed $4 billion at its peak, filed for bankruptcy last summer after the crypto market collapse; Davies' whereabouts are unknown, according to Teneo.
- • The Monetary Authority of Singapore barred Zhu and Davies from conducting regulated investment activity for nine years, effective Sept. 13.
- • Zhu is the latest crypto executive arrested after the 2022 market downturn, following Sam Bankman-Fried (December 2022) and Do Kwon (March 2023).
Summary
Su Zhu, a founder of the cryptocurrency hedge fund Three Arrows Capital, was arrested on Friday, September 29, 2023, at Changi Airport in Singapore while trying to leave the country, according to the fund's liquidators. Zhu, 36, was taken into custody after a Singaporean court on Monday issued committal orders for him and fellow founder Kyle Davies, sentencing both to four months in prison for failing to cooperate with the liquidators investigating the fund's failure. Teneo, the firm managing the liquidation, said Davies' location is unknown.
Based in Singapore, Three Arrows managed roughly $4 billion at its peak. The fund filed for bankruptcy last summer after cryptocurrency markets collapsed, a downturn that drained the savings of many retail investors and pushed other firms into insolvency. After the collapse, Zhu and Davies denied wrongdoing and traveled abroad. In April, they unveiled Open Exchange, a marketplace intended for investors who had lost money in the 2022 crypto turmoil.
Teneo said it would "pursue all opportunities" to ensure Zhu complies with the court order requiring him to provide information and documents relating to Three Arrows. The Monetary Authority of Singapore, which reprimanded the fund last June, separately barred Zhu and Davies from conducting regulated investment activity for nine years, effective Sept. 13, the liquidators said. A lawyer for Zhu did not immediately respond to a request for comment.
Zhu is the latest crypto executive arrested since the market downturn. Sam Bankman-Fried, founder of FTX, was arrested in the Bahamas in December and is set to face trial in federal court in Manhattan; Do Kwon, founder of Terraform Labs, was arrested in Montenegro in March while attempting to board a private flight to Dubai. Both have been charged with fraud.
Based in Singapore, Three Arrows managed roughly $4 billion at its peak. The fund filed for bankruptcy last summer after cryptocurrency markets collapsed, a downturn that drained the savings of many retail investors and pushed other firms into insolvency. After the collapse, Zhu and Davies denied wrongdoing and traveled abroad. In April, they unveiled Open Exchange, a marketplace intended for investors who had lost money in the 2022 crypto turmoil.
Teneo said it would "pursue all opportunities" to ensure Zhu complies with the court order requiring him to provide information and documents relating to Three Arrows. The Monetary Authority of Singapore, which reprimanded the fund last June, separately barred Zhu and Davies from conducting regulated investment activity for nine years, effective Sept. 13, the liquidators said. A lawyer for Zhu did not immediately respond to a request for comment.
Zhu is the latest crypto executive arrested since the market downturn. Sam Bankman-Fried, founder of FTX, was arrested in the Bahamas in December and is set to face trial in federal court in Manhattan; Do Kwon, founder of Terraform Labs, was arrested in Montenegro in March while attempting to board a private flight to Dubai. Both have been charged with fraud.
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