Three Arrows Co-Founder Zhu Apprehended, Liquidator Says

Three Arrows Capital co-founder Su Zhu was apprehended in Singapore while trying to leave the country on Friday.

(Bloomberg) — Three Arrows Capital co-founder Su Zhu was apprehended in Singapore while trying to leave the country on Friday.

Teneo, which is liquidating the defunct firm’s estate, said it received a committal order against Zhu after he failed to comply with an earlier Singapore court order compelling him to cooperate with the liquidation investigation. The order sentenced Zhu to four months in prison, according to a statement by Teneo.

Zhu was apprehended at Singapore’s Changi Airport on Friday afternoon, Teneo said, adding that the Sept. 25 order also saw Zhu’s co-founder Kyle Davies receive the same sentence.

Zhu didn’t immediately respond to a request for comment. Davies couldn’t be immediately reached for comment, and his lawyers didn’t immediately respond to a request for comment. Bloomberg has reached out to Singapore police for comment.

Read: Three Arrows’ Zhu Worries About Jail Time in Liquidator Spat (August 2022)

Three Arrows Capital, once considered among the largest and most successful crypto-native hedge funds, suffered big losses last year on ill-fated Luna tokens and other investments, leaving its creditors owed around $3 billion. Liquidators are seeking to recover more than $1 billion directly from the co-founders.

Teneo said they will seek to engage with Zhu on matters relating to Three Arrows and recovering lost funds while he is in prison. Both Zhu and Davies were banned from conducting any regulated activity in Singapore by the country’s financial watchdog earlier this month.

Read more: Three Arrows Liquidators Seek $1.3 Billion From Fund’s Founders

Zhu’s arrest is only the latest in a string of legal interventions against alleged wrongdoing in the crypto sector, following a series of high-profile business collapses and fraud scandals that wiped out trillions of dollars in market value.

Sam Bankman-Fried was arrested in the Bahamas in December and is due to go on trial in New York on Oct. 3 for his role in the collapse of crypto exchange FTX. Ex-Celsius chief executive office Alex Mashinsky was arrested in July. Do Kwon, who created the collapsed Terra stablecoin and the associated Luna token that helped bring down Three Arrows, is in custody in Montenegro. All three men have denied the various allegations against them.

Read: How Do Kwon Went From Crypto King to Fugitive to Jail: QuickTake

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