A recent incident at Changi Airport in Singapore has sent ripples through the cryptocurrency world. Su Zhu, the founder of the now bankrupt crypto hedge fund, Three Arrows Capital (3AC), was arrested trying to flee the country. As per the disclosure by the fund’s liquidator, Teneo, he was detained following a court order for him and his business partner, Kyle Davies.
Zhu and Davies were accused of contempt of court and slapped with a four-month prison sentence. These once-illustrious crypto movers and shakers were asked to cooperate with Teneo’s investigations to untangle the circumstances leading to 3AC’s downfall. Fervently active on social media after the fund’s collapse, however, both men had so far evaded the firm’s liquidators and authorities.
A significant action against them was taken by the Monetary Authority of Singapore, barring them from launching regulated investments for nine years. Now with Zhu’s arrest, he is set to serve his sentence, and Teneo has plans to engage him in an effort to recover all potential assets previously owned by 3AC, or those obtained through the sale of user assets.
While Teneo continues to prioritize the arduous task of asset recovery and maximizing returns for 3AC’s creditors, it is also prepared to seek additional court orders against the embattled former CEO, Su Zhu. As for Kyle Davies, his location remains a mystery, following his noncompliance with subpoenas by a New York court. An arrest directive has been issued for him, who is being sought after “safely” to serve his sentence.
Tracing the roots of this debacle back to its peak in 2022, 3AC was listed among the leading crypto hedge funds, boasting $10 billion in assets under management. The fund’s bankruptcy was attributed to adverse market conditions triggered by the Terra ecosystem’s downfall and questionable management decisions. The fund currently owes a colossal $3 billion to investors.
Additionally, Su Zhu and Kyle Davies faced major hurdles in May following the collapse of their hedge fund when Dubai’s Virtual Assets Regulatory Authority reproached their unregulated exchange, OPNX. The regulatory authority is determinedly keeping an eagle’s eye on OPNX’s operations to evaluate the necessity of further measures meant to safeguard the market.
Source: Cryptonews
