CRIMINAL CAPITALI$M
Bankrupt Crypto Hedge Fund 3AC's Su Zhu Apprehended in Singapore, Liquidator Says
Jack Schickler
Fri, September 29, 2023
Su Zhu, co-founder of hedge fund Three Arrows Capital, was apprehended at Changi airport in Singapore on Friday, according to the company's liquidator Teneo.
The hedge fund collapsed in 2022, and interconnections within the industry meant the impact of its collapse quickly brought on a new crypto winter.
Zhu, alongside co-founder Kyle Davies, was the subject of a committal order sentencing him to four months' imprisonment due to failure to comply with a court order.
Davies' whereabouts remain unknown, the statement added.
Earlier in September, the Monetary Authority of Singapore banned Zhu and Davies from owning or running any registered capital markets firm for nine years.
In May, the pair were also reprimanded by Dubai's crypto regulator for operating their new venture, a bankruptcy exchange called OPNX, as an unregulated exchange. Davies has also declined to respond to subpoenas relating to 3AC's collapse issued by a New York court.
The native token of the duo's new project fell by 21% as its market cap shrank to $40 million.
Oliver Knight contributed to the reporting of the story
Bankrupt Crypto Hedge Fund 3AC's Su Zhu Apprehended in Singapore, Liquidator Says
Jack Schickler
Fri, September 29, 2023
Su Zhu, co-founder of hedge fund Three Arrows Capital, was apprehended at Changi airport in Singapore on Friday, according to the company's liquidator Teneo.
The hedge fund collapsed in 2022, and interconnections within the industry meant the impact of its collapse quickly brought on a new crypto winter.
Zhu, alongside co-founder Kyle Davies, was the subject of a committal order sentencing him to four months' imprisonment due to failure to comply with a court order.
Davies' whereabouts remain unknown, the statement added.
Earlier in September, the Monetary Authority of Singapore banned Zhu and Davies from owning or running any registered capital markets firm for nine years.
In May, the pair were also reprimanded by Dubai's crypto regulator for operating their new venture, a bankruptcy exchange called OPNX, as an unregulated exchange. Davies has also declined to respond to subpoenas relating to 3AC's collapse issued by a New York court.
The native token of the duo's new project fell by 21% as its market cap shrank to $40 million.
Oliver Knight contributed to the reporting of the story
David Hollerith
·Senior Reporter
Fri, September 29, 2023 at 10:22 AM MDT·2 min read
Authorities arrested disgraced crypto hedge fund co-founder Su Zhu Friday, the latest detainment of a star from the crypto industry’s last bull cycle.
Singaporean authorities apprehended Su Zhu, 36, Friday afternoon at the country’s Changi Airport while he was attempting to leave the country. Singaporean courts placed a “committal order” against him according to Teneo, the court-appointed joint liquidators in the bankruptcy for Zhu’s firm, Three Arrows Capital Ltd.
The court order, placed on Sept. 25, came as a consequence of Zhu’s “deliberate failure” to cooperate with Teneo’s investigations. He was sentenced to four months' imprisonment. The Singaporean courts have granted a similar order for Three Arrows' other co-founder, Kyle Davies, though "his whereabouts remain unknown at this point in time," said a Teneo spokesman.
Separately, the Monetary Authority of Singapore earlier this month prohibited Zhu and Davies from conducting regulated investment activity for nine years each, according to Teneo.
Columbia University graduates and former derivatives traders for Credit Suisse, Zhu and Davies launched Three Arrows Capital in 2012.
Zhu caught the crypto industry’s attention years ago for calling the bottom of “crypto winter” in 2018 when bitcoin traded below $4,000 per coin. After that call, he began growing a following as a so-called crypto markets prodigy.
Photo by: STRF/STAR MAX/IPx 2021
In February 2021 after bitcoin had risen above $30,000, Zhu introduced his crypto "supercycle" thesis, suggesting in a podcast interview that the bitcoin price would avoid facing another bear market—and would instead continue to rise until it reflected the market capitalization of gold.
Two months later, in an interview with Bloomberg, Zhu claimed Three Arrows' assets under management reached the "multi-billion" dollar range.
In late June 2022, Three Arrows filed for bankruptcy in the British Virgin Islands after losing big on the collapsed algorithmic stablecoin protocol, Terra. Shortly after filing for bankruptcy both Zhu and Davies fled US jurisdiction. By June of this year, the pair launched a new investment venture, OPNX, an online platform that allowed investors to trade crypto company bankruptcy claims, including those of Three Arrows Capital.
Zhu is just the latest of several high profile crypto moguls to be detained by the courts after a series of businesses went under—and fraud scandals unfolded within the industry that lead to the plummeting cryptocurrency prices.
For example: New York state is suing Alex Mashinsky, former CEO of crypto lending platform Celsius Network, for alleged crypto fraud. Earlier this year, CEO of Terraform Labs, Do Kwon, who was also charged with multiple counts of fraud by US authorities, was arrested in Montenegro.
Meanwhile, FTX exchange founder Sam Bankman-Fried is currently in jail in Manhattan awaiting his trial, which begins October 2nd.
David Hollerith is a senior reporter for Yahoo Finance covering banking and crypto.
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