Su Zhu, Founder of Bankrupt Crypto Hedge Fund Arrested in Singapore
According to reports, Su Zhu, the founder of the bankrupt crypto hedge fund Three Arrows Capital, has been arrested in Singapore while attempting to flee. Zhu was detained at Changi airport after a committal order was issued against him and his business partner, Kyle Davies. Both Zhu and Davies were sentenced to four months in prison for contempt of court and were issued subpoenas to cooperate with the investigations of the fund’s liquidator, Teneo.
What’s Next for Su Zhu?
Zhu will serve his four-month prison sentence while Teneo engages him to recover assets of Three Arrows Capital. The firm may also seek more court orders against Zhu for the benefit of creditors. Meanwhile, Davies remains on the run from authorities after refusing to honor subpoenas.
A $3 Billion Dent in the Market
At its peak in 2022, Three Arrows Capital had $10 billion worth of assets under management. However, negative market conditions and poor management decisions led to its bankruptcy. The collapse of the Terra ecosystem and reprimands from Dubai’s Virtual Assets Regulatory Authority added to the fund’s problems. Three Arrows Capital currently owes investors approximately $3 billion.
Hot Take: The Fall of Three Arrows Capital and its Consequences
The arrest of Su Zhu and Kyle Davies marks a significant turning point in the downfall of Three Arrows Capital. As they face imprisonment and further legal actions, it remains uncertain whether the fund’s investors will be able to recover their losses. This incident serves as a reminder of the risks associated with investing in crypto hedge funds and highlights the importance of regulatory oversight in the industry. It also underscores the need for thorough due diligence when considering investment opportunities in the crypto market.
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