3AA liquidators arrest cofounder of bankrupt cryptocurrency fund

49
2
3AA liquidators arrest cofounder of bankrupt cryptocurrency fund

The cofounder of the bankrupt cryptocurrency hedge fund Three Arrows Capital has been apprehended by authorities in Singapore Changi Airport on Friday, according to the company's joint liquidators.

He was arrested in accordance with a committal order granted to the liquidators. A statement from the liquidators said Zhu allegedly refused to comply with a court order that compelled him to cooperate with their investigation and account for his activities at 3AC.

Zhu is set to be imprisoned for four months, and during that time, the liquidators said they will try to work with him to recover 3AC assets still owed to creditors.

The court also granted the arrest of Zhu's 3AC cofounder, Kyle Davies, in Singapore.

The $3 billion hedge fund filed for chapter 15 bankruptcy in June 2022 following the collapse of TerraUSD and sister cryptocurrency Luna, which the firm had invested in and supported.

Teneo's liquidators have sought to recover $3.3 billion for the company's creditors since the company's bankruptcy was announced last year. The liquidators are looking for $1.3 billion from Zhu and Davies, Bloomberg reported, based on debts that the cofounders racked up for the company in the months leading up to the bankruptcy.

The Monetary Authority of Singapore, which regulates the financial industry, has banned Zhu and Davies from participating in the country's regulated financial industry for nine years. Coindesk said it includes serving as a director, a majority shareholder, or in the management of any capital market services firm. The pair had been working on a new venture, OPNX, a crypto exchange that aims to allow people to trade bankruptcy claims.

Since their hedge fund collapsed, both Zhu and Davies have shown little remorse for their actions and were enjoy the slow life in Bali, according to a June profile by the New York Times.