Three Arrows Capital Co-Founder Faces Questioning in Singapore Court
Three Arrows Capital (3AC) co-founder Su Zhu is being questioned in a Singapore court by lawyers representing the firm’s liquidator. The liquidator is seeking to recover billions of dollars in assets from the bankrupt fund.
The questioning includes inquiries about how the crypto hedge fund failed and the location of billions worth of assets. The liquidators aim to recover $1.3 billion from Zhu and 3AC co-founder Kyle Davies, with creditors owed a total of around $3.3 billion.
Zhu was previously arrested for failing to comply with a court order related to his activities as 3AC’s co-founder and investment manager. He is expected to be released this month based on good behavior provisions.
Civil Proceedings vs. Criminal Charges
The court proceedings are civil in nature and not criminal. Zhu and Davies have not faced criminal charges in Singapore regarding the collapse of 3AC. However, in September, they were prohibited from engaging in financial activities by the Monetary Authority of Singapore (MAS) due to inadequate risk management for crypto trading.
The Unraveling of 3AC
Following the collapse of the TerraUSD algorithmic stablecoin in May 2022, 3AC experienced significant losses as crypto exchanges liquidated its positions. The hedge fund was ordered to liquidate in June 2022 and filed for bankruptcy the following month.
New Ventures
In April 2023, Zhu and Davies launched OPNX, an exchange for trading bankruptcy claims. They also started a new VC fund called 3AC Ventures in June.
Hot Take: Three Arrows Capital Co-Founder Questioned in Singapore Court Over Bankruptcy
Three Arrows Capital co-founder Su Zhu is facing questioning in a Singapore court as the firm’s liquidator seeks to recover billions of dollars in assets. The court proceedings focus on the failure of the crypto hedge fund and the whereabouts of valuable assets. Zhu and his co-founder are being pursued for $1.3 billion, with creditors owed a total of $3.3 billion.
This civil matter follows Zhu’s previous arrest for not complying with a court order and subsequent jail time. While no criminal charges have been filed, the Monetary Authority of Singapore previously prohibited financial activities by Zhu and his co-founder due to inadequate risk management. The collapse of 3AC was triggered by losses from the TerraUSD stablecoin and resulted in liquidation and bankruptcy.
In recent ventures, Zhu and his co-founder launched an exchange for trading bankruptcy claims and established a new VC fund. The outcome of the court proceedings will have significant implications for the recovery of funds and accountability in the crypto industry.
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