Co-founder of Three Arrows Capital Placed in Singapore Prison
The co-founder of Three Arrows Capital, Su Zhu, has been sent to Changi Prison in Singapore after the liquidators alerted the police that he was heading to the airport. This action was taken as part of an intensified effort to locate the dispersed assets of the failed crypto hedge fund. The decision to imprison Zhu came after a Singapore court approved a four-month jail sentence due to his non-compliance with the fund’s dissolution process.
According to Bloomberg sources, liquidators informed the police when they learned on September 29 that Zhu was en route to Changi Airport. Zhu had been under close observation by the liquidators while in Singapore and was detained at the terminal based on a tip-off that he might be traveling from his residence. Singapore officials confirmed the arrest of an unnamed 36-year-old male at the airport on September 29.
Three Arrows Capital’s Collapse
The collapse of Three Arrows Capital (3AC) in 2022 was attributed to excessive leverage on long positions across various cryptocurrency markets and derivatives. Creditors claim that the company engaged in fraudulent activities and misled investors. As a result, on September 14, the Monetary Authority of Singapore (MAS) issued a nine-year prohibition order against the founders of 3AC.
This order prohibits the founders from participating in any regulated activity within the management team of the company and prevents them from serving as directors or becoming substantial shareholders in any capital markets under the Securities and Futures Act 2001 (SFA). The founders are accused of violating several securities laws in Singapore, including SFA and Securities and Futures (Licensing and Conduct of Business) Regulations (SFR).
Hot Take: Imprisonment for Non-Compliance
The imprisonment of Su Zhu, co-founder of Three Arrows Capital, showcases the seriousness with which authorities are addressing non-compliance in the crypto industry. As the liquidators intensify their efforts to locate the assets of the failed hedge fund, legal actions such as imprisonment are being taken against individuals who fail to comply with the dissolution process.
This case serves as a warning to other crypto industry participants about the potential consequences of not adhering to regulatory requirements. It highlights the importance of transparency, compliance, and accountability in order to maintain trust and integrity within the industry. Authorities are sending a clear message that they will not tolerate fraudulent activities or attempts to disperse assets without proper resolution.
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