Three Arrows Capital Co-Founder Su Zhu Arrested in Singapore

Su Zhu, the co-founder of defunct crypto hedge fund Three Arrows Capital (3AC), has been arrested by authorities in Singapore after attempting to leave the country.

Teneo, the joint liquidators of his fallen company, confirmed the news in a statement shared with Decrypt on Friday.

“Su Zhu was apprehended at Changi Airport whilst attempting to travel out of Singapore following a committal order by the Singapore courts against him,” read the company’s statement.

“Mr. Zhu will be held in prison to serve his sentence for four months,” the firm added. Zhu’s fellow co-founder, Kyle Davies, is also due for four months behind bars, though his whereabouts remain unknown.

Teneo said it filed and obtained its committal order against Zhu on Monday after the founder refused to follow a court order compelling him to account for his activities as 3AC’s founder and investment manager.

3AC fell apart in June 2022 due to overexposure to the algorithmic stablecoin protocol, Terra, which entered an inflationary death spiral in the previous month. Both Zhu and Davies have admitted they were close to Terra co-founder Do Kwon, who was arrested in Montenegro earlier this year.

Both Zhu and Davies went underground shortly after 3AC’s collapse last year, citing death threats. In the meantime, they launched a new exchange—OPNX—for traders to more easily exchange bankruptcy claims for other fallen crypto companies that year, such as FTX.

While Zhu is in prison, Teneo said it plans to press him for more information related to 3AC to assist with asset recovery and to ensure he complies with his court order both during and after his imprisonment.

Former FTX boss Sam Bankman-Fried volunteered to assist with the bankruptcy process for his fallen exchange during his time on bail. However, he has since been sent to prison for using his limited communications to publicly leak the diary of Alameda CEO Caroline Ellison, which was deemed a form of witness tampering.

Earlier this month, the Monetary Authority of Singapore barred both Zhu and Davies from engaging in regulated investment activity for nine years each.