Singapore Authorities Arrest Co-founder of 3AC

Singapore Authorities Arrest Co-founder of 3AC

Time Stamp: September 29, 2023 1:31 PM
Source Node: 2299939

Su Zhu, the Co-founder of Three Arrows Capital (3AC), has
been arrested in Singapore. His arrest is linked to his alleged failure to
cooperate during the bankruptcy proceedings of 3AC, the now-bankrupt crypto
lending company.

Today (Friday) afternoon at Changi Airport in Singapore, Zhu was
arrested. His attempt to leave the country led to his detention, a development
confirmed by Teneo, the entity overseeing 3AC’s liquidation.

3AC was known for its investments in projects like LUNA,
Aave, Avalanche, BlockFi, Deribit, and Solana before its collapse last year.
The downfall began when LUNA, a significant investment of 3AC, experienced a
massive crash in May, triggering a series of events.

Despite managing up to $18 billion in cryptocurrency assets
at its peak, 3AC failed to meet margin calls in June, raising questions about
its financial stability. In addition, the failure to repay a substantial debt
of $665 million to crypto broker Voyager Digital exacerbated the situation,
further destabilizing the company.

The Monetary Authority of Singapore (MAS) reprimanded 3AC
and its founders in June 2022. This reprimand was due to alleged misinformation, failure to report ownership changes in the executive
ranks, and exceeding allowable asset thresholds for a registered fund
management company.

According to the MAS, the investigations uncovered that the
company failed to notify regulators about the employment of its representatives and
made false representations about them.

In June, a report by the New York Times indicated that Kyle
Davies, the Co-founder of 3AC, and Zhu had embarked on a year-long journey that
took them to Bali instead of facing the aftermath of the collapse of their
hedge fund. They departed from Singapore, where Three Arrows was headquartered,
and embarked on a journey across Asia, essentially taking a summer sabbatical.

3AC’s Downfall and Regulatory Reprimand

Meanwhile, Singapore’s financial market regulator barred the duo from participating in the city-state’s financial services sector for nine
years in September. The ban was effected on September 13 in response to
several regulatory reporting lapses tied to the fund’s operations.

Founded in 2012 and headquartered in Singapore, 3AC was once
a prominent cryptocurrency hedge fund known for its highly leveraged positions.
However, its fortunes took a sharp downturn, incurring losses exceeding $400
million amid the crypto market’s slump in the previous year.

The consequences of 3AC’s collapse extended far beyond its
immediate stakeholders. Voyager Digital, unable to recover its debts from 3AC,
was forced to file for bankruptcy . The domino effect resulted in damages
exceeding $3 billion, affecting several companies in the crypto space.

Su Zhu, the Co-founder of Three Arrows Capital (3AC), has
been arrested in Singapore. His arrest is linked to his alleged failure to
cooperate during the bankruptcy proceedings of 3AC, the now-bankrupt crypto
lending company.

Today (Friday) afternoon at Changi Airport in Singapore, Zhu was
arrested. His attempt to leave the country led to his detention, a development
confirmed by Teneo, the entity overseeing 3AC’s liquidation.

3AC was known for its investments in projects like LUNA,
Aave, Avalanche, BlockFi, Deribit, and Solana before its collapse last year.
The downfall began when LUNA, a significant investment of 3AC, experienced a
massive crash in May, triggering a series of events.

Despite managing up to $18 billion in cryptocurrency assets
at its peak, 3AC failed to meet margin calls in June, raising questions about
its financial stability. In addition, the failure to repay a substantial debt
of $665 million to crypto broker Voyager Digital exacerbated the situation,
further destabilizing the company.

The Monetary Authority of Singapore (MAS) reprimanded 3AC
and its founders in June 2022. This reprimand was due to alleged misinformation, failure to report ownership changes in the executive
ranks, and exceeding allowable asset thresholds for a registered fund
management company.

According to the MAS, the investigations uncovered that the
company failed to notify regulators about the employment of its representatives and
made false representations about them.

In June, a report by the New York Times indicated that Kyle
Davies, the Co-founder of 3AC, and Zhu had embarked on a year-long journey that
took them to Bali instead of facing the aftermath of the collapse of their
hedge fund. They departed from Singapore, where Three Arrows was headquartered,
and embarked on a journey across Asia, essentially taking a summer sabbatical.

3AC’s Downfall and Regulatory Reprimand

Meanwhile, Singapore’s financial market regulator barred the duo from participating in the city-state’s financial services sector for nine
years in September. The ban was effected on September 13 in response to
several regulatory reporting lapses tied to the fund’s operations.

Founded in 2012 and headquartered in Singapore, 3AC was once
a prominent cryptocurrency hedge fund known for its highly leveraged positions.
However, its fortunes took a sharp downturn, incurring losses exceeding $400
million amid the crypto market’s slump in the previous year.

The consequences of 3AC’s collapse extended far beyond its
immediate stakeholders. Voyager Digital, unable to recover its debts from 3AC,
was forced to file for bankruptcy . The domino effect resulted in damages
exceeding $3 billion, affecting several companies in the crypto space.

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