Su Zhu, co-founder of the now-defunct crypto hedge fund Three Arrows Capital (3AC), has been arrested in Singapore. His arrest stems from his failure to comply with a Singapore court order to assist in the liquidation investigation. As a result, Zhu is now facing a four-month jail sentence. 3AC was a significant player in the 2020-2021 crypto boom but eventually folded, mirroring the fate of many similar ventures.
The Fallen Crypto Titans
Three Arrows Capital (3AC) was a major player during the crypto surge, standing alongside names like Terra-Luna, FTX, Celsius, and Voyager. All these entities are now dissolved and under legal scrutiny. At its zenith, 3AC managed a staggering $10 billion. However, by July 2022, the fund declared bankruptcy, shortly after the crypto market was shaken by the Terra-Luna ecosystem’s downfall. The fund’s unpaid debts are believed to be around $3.5 billion.
3AC‘s founders, Su Zhu and Kyle Davies, shared a bond that began at a prestigious Massachusetts school and continued into their Ivy League years. They were celebrated as brilliant crypto investors, known for their audacious and optimistic forecasts.
Superyacht & Real Estate
During 3AC‘s golden period, propelled by Bitcoin’s meteoric rise in 2021, the pair even commissioned a luxury superyacht whimsically named “Much Wow.”
The yacht’s registered ownership company, Much Wow Ltd, failed to make final payments, the liquidators revealed in a bankruptcy-court hearing. Because of non-payment, the 171-foot (52-meter) went up for sale.
EdgeProp reports that between 2019 and 2021, Zhu acquired three bungalows in Singapore, some under his wife, Tao Yaqiong’s name. The combined value of these properties is around $83.55 million.
From being a billionaire, Zhu’s financial status plummeted with 3AC’s downfall, culminating in his recent incarceration.
The Bankruptcies Procedures
Teneo, the financial firm overseeing the liquidation of the collapsed crypto hedge fund, has repeatedly voiced their displeasure over Zhu and Davies’ non-cooperation. Their attempts to serve subpoenas even reached social media platforms. Recent findings indicate that Teneo aims to retrieve $1.3 billion from the duo, holding them accountable for the fund’s deficits.
In the past, the duo has avoided submitting crucial documents and details for the investigation. They even skipped a liquidation hearing, with indications of one of them tweeting from a yacht in Dubai, as observed by a senior Teneo executive.
Furthermore, the Monetary Authority of Singapore (MAS) criticized 3AC for misinformation and for breaching fund management licensing regulations.
After-Party Headache
Following 3AC‘s demise, Zhu liquidated several of his assets. Rumors suggest that both Zhu and Davies took refuge in Bali, Indonesia. Zhu reportedly indulged in hobbies like video gaming and surfing. The crypto world has recently witnessed many of its leading figures facing legal repercussions. For instance, Do Kwon, linked with the Luna crypto project, was detained in Montenegro. Similarly, Sam Bankman-Fried, the co-founder and ex-CEO of FTX, is currently incarcerated and awaiting trial in Manhattan.
