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Zhu Su of Three Arrows Capital faces intense scrutiny in Singapore



Zhu Su of Three Arrows Capital faces intense scrutiny in Singapore

Zhu Su, the co-founder of the now-defunct hedge fund, Three Arrows Capital, recently underwent a two-day court hearing in Singapore. This hearing is part of the ongoing efforts by liquidators to recover billions of dollars for creditors after the collapse of the crypto fund.

During the court session, which took place earlier this week, Zhu responded to lawyers representing the liquidator, Teneo. The aim was to obtain crucial details about the fund’s failure and the location of its assets, with the questioning serving to gather essential information for the creditors.

Three Arrows Capital was a cryptocurrency hedge fund based in Singapore that encountered significant legal and financial difficulties. At its peak, the fund managed billions of dollars. However, following the collapse of the cryptocurrency markets, it filed for bankruptcy in 2022.

The liquidation process is currently ongoing, accompanied by legal actions against the founders of the fund, Su Zhu and Kyle Davies. Both founders have faced arrests and legal consequences, including potential prison sentences, for their failure to cooperate with the fund’s liquidators.

Zhu’s cooperation was eventually obtained through legal means after he was arrested at Singapore’s airport on September 29th. He had been incarcerated for four months due to his non-cooperation in the winding-up process of Three Arrows. Based on good behavior provisions, he is expected to be released this month.

Teneo, the appointed liquidator, accuses Zhu and the other founder of the fund, Kyle Davies, of providing insufficient cooperation during the investigation. They are seeking to recover $1.3 billion from both individuals. Teneo estimates that creditors are owed approximately $3.3 billion overall.

The ongoing civil proceedings between Zhu and Teneo do not involve any criminal charges against Zhu or Davies in Singapore. Details obtained from the court questioning will be shared with creditors to maximize potential recoveries.

Furthermore, Zhu, who previously mentioned facing baiting challenges in their cooperation efforts, continues to confront persistent legal challenges. In mid-September, the Singapore central bank imposed nine-year prohibition orders on both Zhu and Davies, citing risk management failings and the provision of false information at Three Arrows.

Once considered one of the largest and most successful crypto hedge funds, Three Arrows had shifted registration to the British Virgin Islands before its collapse. Teneo, appointed by a British Virgin Islands court in June last year, is responsible for overseeing the liquidation of the fund’s assets.

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