On Friday, Su Zhu, the founder of the Crypto Fund Three Arrows Capital, was arrested at Changi Airport in Singapore. The liquidators of the company claimed they found the company attempting to flee the country. Mr. Zhu, a 36-year-old man, was sentenced to four-months in prison by the Singaporean Court on Monday, alongside another Three Arrows founder, Kyle Davies, for failing to cooperate during the investigation of their failed hedge funds. Mr. Davies’ location is currently unknown according to Teneo, the firm that is handling the fund’s liquidation.
Last summer, Three Arrows, a Singapore-based company, filed for bankruptcy after the collapse of the cryptocurrency markets. At its peak, the fund managed $4 billion. This collapse caused a financial crisis resulting in the bankruptcy of many companies and the draining of millions of amateur investors’ savings.
Mr. Zhu is the latest crypto executive to be arrested since the crypto market collapse last year. In December, Sam Bankman-Fried, the founder of the crypto-exchange FTX, was arrested in the Bahamas and later charged with orchestrating fraud involving his company. His criminal trial begins in a federal court in Manhattan on Tuesday.
In March, Do Kwon, the founder of a crypto company Terraform Labs, was arrested in Podgorica, the capital of Montenegro, as he and a travel companion attempted to board a flight to Dubai, United Arab Emirates. Fraud has since been added to the charges.
An attorney for Mr. Zhu did not immediately respond to a request for comment. Teneo stated that they are doing “all they can” to ensure Mr. Zhu complies with the court order during his imprisonment. After Three Arrows collapsed, Mr. Zhu and Mr. Davies denied any wrongdoing and travelled. Mr. Davies spent time in Spain, Bali, and other places, while Mr. Zhu played video games and found a surfing instructor. In April, they unveiled Open Exchange, a marketplace for investors who had lost money during the crypto implosion.
The Monetary Authority of Singapore, who reprimanded Three Arrows in June, banned Mr. Zhu and Mr. Davies from conducting regulated investments activities for nine-years, effective September 13th.
