Co-Founder of Failed Hedge Fund Three Arrows Capital Arrested
In a significant development for the cryptocurrency industry, Su Zhu, co-founder of the failed hedge fund Three Arrows Capital (3AC), was apprehended at Changi Airport in Singapore while attempting to leave the country. Following his arrest, Zhu has been sentenced to four months in prison according to 3AC’s joint liquidator, Teneo.
Efforts to Recover Assets
The liquidators will actively engage with Zhu during his prison term to address matters concerning Three Arrows Capital. Their main focus will be on recovering assets that belong to 3AC or were acquired using the fund’s resources. To maximize returns for the hedge fund’s creditors, further court proceedings may be initiated if necessary.
Non-Compliance and Committal Orders
Zhu’s arrest and sentencing come after a committal order was granted on September 25 due to his intentional non-compliance with a court directive. The court had required Zhu’s cooperation with the liquidators’ investigations by providing a detailed account of his activities as a co-founder and former investment manager of 3AC. A similar committal order was also issued against Kyle Davies, the other co-founder, whose current whereabouts remain unknown.
Focus on Asset Recovery
The liquidators have consistently prioritized the recovery of 3AC’s assets and maximizing returns for its creditors. Their efforts are centered around retrieving the fund’s property and assets acquired using its funds. Teneo emphasizes that they will continue to work diligently towards these objectives and may seek additional court orders to facilitate the process.
Hot Take: Implications for the Crypto Industry
The arrest and sentencing of Su Zhu, co-founder of Three Arrows Capital, highlight the growing regulatory scrutiny in the cryptocurrency industry. It underscores the importance of compliance and cooperation with authorities to ensure transparency and protect investors’ interests. This development serves as a reminder that individuals and organizations operating in the crypto space must adhere to legal requirements and fulfill their obligations. As the industry continues to evolve, regulatory enforcement is likely to increase, emphasizing the need for responsible practices and accountability.
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