In a recent development, co-founder of Three Arrows Capital (3AC), Su Zhu, faced questioning in a Singapore court regarding the collapse of the crypto fund. This marks a crucial opportunity for liquidators to gather vital information as they strive to recover billions of dollars owed to creditors.
The two-day court hearing required Zhu to respond to lawyers representing the liquidator, Teneo, who sought details on the fund’s failure and the location of assets.
Three Arrows Capital Co-Founder’s Release Looms
According to a Bloomberg report, the court hearing was approved in the city-state after Zhu’s arrest at the Singapore airport on September 29, 2023. As reported by Bitcoinist, Su Zhu had been previously jailed for four months for non-cooperation in winding up Three Arrows Capital.
Zhu is expected to be released this month under standard good behavior provisions. However, according to the report, Zhu’s legal representative, the court, and the prison service declined to comment on the matter. Teneo, the liquidator, also declined to comment.
Per the report, the proceedings are considered a civil matter, and no criminal charges have been brought against Zhu or his co-founder, Kyle Davies, in Singapore. The information obtained from the court questioning will be shared with creditors to maximize potential recoveries.
The collapse of Three Arrows Capital in 2022 had far-reaching consequences, contributing to a $2 trillion crypto market downturn and triggering numerous other collapses within the sector.
As previously reported, the liquidators have accused Zhu and Davies of obstruction of their investigation and are seeking recovery of $1.3 billion from the two co-founders. In total, creditors are owed approximately $3.3 billion, according to Teneo.
Bans On Co-Founders Su Zhu And Kyle Davies
In mid-September, Singapore’s central bank imposed nine-year prohibition orders on Zhu and Davies, citing risk management failings and the provision of false information related to their activities at Three Arrows.
The fund, once considered one of the largest and most successful crypto hedge funds, shifted its registration to the British Virgin Islands after previously operating from Singapore. Teneo was appointed by a British Virgin Islands court in June last year to liquidate the fund’s assets.
Zhu and Davies saw their reputations tarnished as the market experienced a downturn, exposing risky practices. Bloomberg highlights that liquidators are actively collaborating with authorities worldwide in their efforts to locate Davies.
The questioning of Su Zhu in a Singapore court offers a crucial opportunity for liquidators to gather valuable information regarding the collapse of Three Arrows Capital. As the legal proceedings unfold, the focus remains on recovering billions of dollars owed to creditors.
Featured image from Shutterstock, chart from TradingView.com
