SINGAPORE: Cryptocurrency fund Three Arrows Capital (3AC) co-founder Zhu Su, who was arrested at Changi Airport on Sept 29, was in court for private proceedings this week facing questions lawyers for Teneo, the firm appointed as the joint liquidator of 3AC after its failure.
The crypto hedge fund is said to owe 27 different creditors a whopping US$3.3 billion (S$4.4 billion), including over US$2 billion (S$2.67 billion) to Genesis Global Trading, a digital currency lender.
Zhu’s court appearance provides Teneo with its best opportunity to gather information to regain the billions poured into 3AC, Bloomberg noted. This includes determining where the company’s assets are and how 3AC failed.
Teneo told The Business Times after Zhu’s arrest that he was given a four-month prison sentence under a committal order due to his failure to cooperate with investigations into 3AC. Kyle Davies, who co-founded the company, was given the same committal order, although he remains at large.
People familiar with the 3AC case told Bloomberg that Zhu is scheduled for release this month according to standard provisions for good behaviour.
“The proceedings between Zhu and Teneo’s representatives are a civil matter. Zhu and Davies haven’t faced any criminal charges in Singapore. Details obtained from the questions in court will be shared with creditors under the aim of maximizing recoveries, according to the people,” Bloomberg noted.
In 2022, 3AC collapsed amid the downturn of digital currency around the world. It had been one of the most well-known crypto hedge funds around the globe and had managed around $10 billion in assets even until March of that year.
The company’s fall shocked the crypto market as it demolished the savings of millions of amateur investors. However, according to a report from the New York Times, founders Zhu and Davies lived it up in Bali, Indonesia, after the company’s collapse.
After leaving Singapore, where 3AC was based, the two headed to Bali. Indonesia does not have an extradition treaty with the United States, noted the NYT.
Zhu and Davies founded 3AC in 2012 at the kitchen table of their apartment. The two men were then working as traders at Credit Suisse. At one point, their crypto assets were allegedly worth several billion dollars.
The Monetary Authority of Singapore reprimanded 3AC on June 30, 2022, because it had provided false information and breached industry licensing rules for fund management.
Read also: Rise & fall of 3AC founder Su Zhu: From crypto king to arrest at Changi Airport /TISG