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Su Zhu, co-founder of the now-defunct crypto hedge fund Three Arrows Capital, has found himself in legal trouble, as he was apprehended at an airport in Singapore while attempting to leave the country. This dramatic turn of events comes after Su Zhu failed to comply with a court order that required him to cooperate with an investigation connected to the liquidation of Three Arrows Capital. As a result of his non-compliance, Su Zhu has been sentenced to serve a four-month prison term.
The situation is part of a broader legal process initiated by the liquidator of Three Arrows Capital, Teneo. The liquidator had sought and obtained a committal order against Su Zhu, citing his deliberate refusal to cooperate with the investigation and provide an account of his activities in his capacity as one of the founders of the hedge fund. This legal action signifies the seriousness of the allegations and the importance of accountability in the aftermath of the fund's downfall.
It's important to note that a similar committal order was also issued against Kyle Davies, the other co-founder of Three Arrows Capital. However, as of now, Kyle Davies has not been apprehended, as his whereabouts remain unknown. This development adds an element of intrigue to the unfolding story, leaving questions about his role and potential legal consequences unanswered.
Earlier this month, the Monetary Authority of Singapore (MAS) took regulatory action by banning both Su Zhu and Kyle Davies from participating in any regulated business activities within the country. This move by MAS underscores the seriousness of the allegations against them and their potential implications for the broader crypto industry in Singapore.
Three Arrows Capital was once a prominent and influential player in the cryptocurrency market, managing substantial assets and investments. However, the fund encountered severe financial difficulties in the wake of the collapse of the Terra ecosystem in 2021. These challenges ultimately led to the fund's filing for bankruptcy in July 2022, revealing substantial debts of over $3.5 billion owed to its top creditors.
The legal actions against Su Zhu and Kyle Davies are the latest chapters in the story of Three Arrows Capital's downfall. They serve as a stark reminder of the complexities and potential legal consequences that can arise in the cryptocurrency industry, which is still evolving and subject to regulatory scrutiny and oversight. As the legal proceedings continue, they may shed further light on the circumstances surrounding the fund's collapse and its impact on investors and creditors.
