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Three Arrows Co-Founder Su Zhu Faces Singapore Court; Liquidators Pursue Billions

Updated: Jan 5

[Edited] In a significant development, Su Zhu, co-founder of Three Arrows Capital, has been questioned in a Singapore court as liquidators strive to recover billions of dollars.

Zhu, who was arrested at the Singapore airport in September, was jailed for four months for failing to cooperate with the winding up of Three Arrows. Liquidators have accused Zhu and the fund's other founder of not providing meaningful cooperation in their efforts to recover US$1.3 billion.


During the two-day court hearing, Zhu was required to respond to lawyers representing the liquidator, Teneo. The lawyers sought information on the fund's failure and the location of assets. The questioning was approved by the court and Zhu is set to be released this month based on good behavior.


Three Arrows Capital, once considered one of the largest and most successful crypto hedge funds, collapsed in 2022 due to leveraged bets gone wrong. This collapse triggered a US$2 trillion crypto market downturn and led to several other collapses in the sector. Liquidators are seeking to recover US$1.3 billion from Zhu and the fund's other founder, Kyle Davies, with estimated overall creditor claims amounting to US$3.3 billion.


The proceedings between Zhu and Teneo are a civil matter and no criminal charges have been filed against Zhu or Davies in Singapore. The information obtained from the questioning will be shared with creditors to maximize recoveries.


Zhu has previously expressed frustration with the liquidators, stating that their efforts to cooperate were met with hostility. In correspondence submitted to a New York bankruptcy court, Zhu and Davies' legal counsel described the court orders obtained by the liquidators as "baseless."


It is worth noting that Singapore's central bank imposed nine-year prohibition orders on Zhu and Davies in mid-September, citing risk management failures and the provision of false information by Three Arrows.


As the liquidators continue their efforts to locate Davies, who remains at large, they are collaborating with authorities worldwide. Three Arrows, which had previously operated out of Singapore, shifted its registration to the British Virgin Islands. Teneo was appointed by a British Virgin Islands court in June last year to liquidate the fund's assets.


 

  • Su Zhu, co-founder of Three Arrows Capital, has been questioned in a Singapore court as liquidators seek to recover billions of dollars.

  • Zhu was jailed for four months for failing to cooperate with the winding up of Three Arrows.

  • Liquidators accuse Zhu and the fund's other founder of not providing meaningful cooperation.


Source: SCMP

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