Tech

A Founder of the Crypto Hedge Fund Three Arrows Capital Is Arrested


Su Zhu, a founder of the cryptocurrency fund Three Arrows Capital, was arrested on Friday in Singapore while trying to leave the country, the liquidators of the company said.

Mr. Zhu, 36, was arrested at Changi Airport, the liquidators said. A Singaporean court on Monday had issued what are known as “committal” orders for Mr. Zhu and another Three Arrows founder, Kyle Davies, sentencing both to four months in prison after they failed to cooperate with the liquidators investigating their failed hedge fund. Mr. Davies’s location is unknown, according to Teneo, the firm that is working on the fund’s liquidation.

Last summer, Three Arrows, which is based in Singapore and managed $4 billion at its peak, filed for bankruptcy after the cryptocurrency markets melted down. When the fund collapsed, a large swath of the industry was dragged down with it. The ensuing crisis drained the savings of millions of amateur investors and plunged other companies into bankruptcy.

Mr. Zhu is the latest crypto executive to be arrested after the crypto market plunged last year.

In December, Sam Bankman-Fried, the founder of the crypto exchange FTX, was arrested in the Bahamas and later charged with orchestrating a sweeping fraud involving his company. His criminal trial begins in a federal court in Manhattan on Tuesday.

In March, Do Kwon, the founder of the crypto company Terraform Labs, was arrested in Podgorica, the capital of Montenegro, as he and a travel companion tried to board a private flight to Dubai, United Arab Emirates. He has also been charged with fraud.

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A lawyer for Mr. Zhu didn’t immediately respond to a request for comment.

In a statement, Teneo said it would “pursue all opportunities” to ensure that Mr. Zhu “complies in full with the court order made against him for provision of information and documents” relating to Three Arrows during his imprisonment.

After Three Arrows collapsed, Mr. Zhu and Mr. Davies denied wrongdoing and went traveling. Mr. Davies spent time in Spain, Bali and elsewhere. Mr. Zhu played video games and found a surf instructor. In April, they unveiled a new business, Open Exchange, a marketplace for investors who had lost money during last year’s crypto implosions.

The Monetary Authority of Singapore, a regulator that reprimanded Three Arrows last June, prohibited Mr. Zhu and Mr. Davies from conducting regulated investment activity for nine years, effective Sept. 13, the liquidators added.



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