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Authorities have arrested crypto fugitive Su Zhu, co-founder of bankrupt digital asset hedge fund Three Arrows Capital, who was apparently attempting to flee Singapore.
Liquidators handling the bankruptcy estate of the collapsed fund, known as 3AC, said in a statement on Friday that Zhu was apprehended at Changi Airport in Singapore, trying to travel out of the city state.
Zhu and co-founder Kyle Davies have both been sentenced to four months in prison, according to Teneo, the financial advisory firm handling 3AC’s liquidation. Davies’ whereabouts remain unknown.
The Singapore Courts ruled against Zhu for deliberately failing to comply with court orders compelling him to cooperate with Teneo’s investigation into creditors’ claims and the implosion of the multibillion-dollar fund.
At its peak in 2022, 3AC managed about $10 billion in assets, making it one of the most prominent crypto hedge funds in the world. The firm filed for bankruptcy in mid-2022Â after the plunge in cryptocurrency prices and a particularly risky trading strategy combined to wipe out its assets and leave it unable to repay lenders. 3AC had a lengthy list of counterparties, and its demise set off a wave of bankruptcies across the sector.
Davies, who remains at large, faces a similar committal order from the court. Police have been directed to arrest Davies and bring him in “safely” so he can serve his four-month sentence.
While Zhu is in custody, Teneo says it will work with him on matters relating to 3AC, “focusing on the recovery of assets that are either the property of 3AC or that have been acquired using 3AC’s funds.” The firm added that it may seek further court orders against him.
“Throughout the process, the liquidators’ priority has been recovering the assets of 3AC and maximising returns for its creditors,” Teneo said in a written statement.
In January, Davies and Zhu were reportedly attempting to attract investors for a new venture — a distressed debt marketplace dubbed GTX that was looking to capitalize on bankruptcies in the industry.
The Monetary Authority of Singapore, which has responsibility for regulating investment activities, has barred the co-founders from conducting regulated investment activity for nine years, according to Teneo.
This story originally appeared on CNBC
