Three Arrows Capital Co-founder Su Zhu Arrested in Singapore
Su Zhu, the head of Three Arrows Capital (3AC), has been detained in Singapore due to a court-issued committal order. According to information from Teneo, the company’s joint liquidator, Zhu was captured at Changi Airport while trying to depart Singapore after a court-mandated committal order.
Zhu will spend the next four months behind bars. Similarly, a four-month prison sentence has been given to 3AC’s other co-founder, Kyle Davies. However, evading the grip of the law so far, Davies remains elusive, with authorities ramping up efforts to locate him.
Zhu was under arrest after failing to adhere to an order that required his cooperation in the investigations into Three Arrows Capital, which filed for bankruptcy last year. 3AC’s bankruptcy in the second quarter of 2022 triggered a series of collapses in the crypto domain, affecting firms like Celsius Network and Voyager Digital. Before bankruptcy, 3AC oversaw roughly $10 billion in assets, positioning it as one of the world’s leading crypto hedge funds.
Adding to their portfolio of controversies, in early 2023, both Zhu and Davies launched an unregulated crypto platform named Open Exchange (OPNX). This platform introduced its own cryptocurrency, FLEX. However, it wasn’t long before OPNX faced regulatory scrutiny. By August 2023, Dubai’s Virtual Assets Regulatory Authority (VARA) had imposed a hefty fine of approximately $2.8 million on OPNX.
Singapore’s regulatory body was not far behind in its actions. The Monetary Authority of Singapore, in September, restricted both Zhu and Davies, barring them from either ownership or management roles in any licensed capital markets ventures for an extended period of nine years.
In the financial world, the repercussions of such news are often swift and substantial. True to form, following the announcement of Zhu’s arrest, shares of Zhu Su’s Friend Tech keys experienced a drastic drop, declining by a staggering 38%.
This is only one of the many arrests as of late, as the crypto world increasingly stays under scrutiny and bad actors are facing consequences for their actions. In August, former Opensea Executive Nate Chastain was sentenced to three months of prison for insider trading. According to the U.S. Department of Justice, it was the first ever arrest for a digital asset insider trading scheme.
Earlier this month, Faruk Fatih Özer, the founder of the collapsed Turkish crypto exchange Thodex and his two siblings, were sentenced to 11,196 years, 10 months and 15 days in prison, according to local media. The trio was accused of defrauding investors out of millions of dollars.
These instances show that the crypto industry is witnessing increased regulatory oversight, leading to legal repercussions for individuals involved in illicit activities like insider trading