Three Arrows Capital's Su Zhu is on the verge of being released due to his good behavior in custody

2023-12-14 03:04:37

Lawyers for 3AC liquidator Teneo have reportedly confronted Zhu over the collapse of the crypto hedge fund.

Bloomberg reported on December 13 that Su Zhu, co-founder of the now-defunct crypto hedge fund Three Arrows Capital (3AC), will be released later this year, a month after months in detention.

In September, Zhu was sentenced to four months in prison for not cooperating with the liquidation process of the failed company. According to Bloomberg, Zhu was released because of his good behavior in custody.

3AC Liquidator Questioning Zhu

Zhu’s recent appearance in the Singapore court coincided with a lawyer for 3AC-appointed liquidator Teneo asking him about the reasons for the company’s collapse and the whereabouts of its assets.

Teneo wants to recover $1.3 billion from Zhu and his partner Kyle Davies, who is also wanted by the Singapore authorities. Notably, the court-appointed liquidator had previously accused the bankrupt company’s co-founders of non-cooperation and “selectively and piecemeal disclosure” of the bankrupt company’s hedge fund assets.

Last year, 3AC was one of several cryptocurrency companies that collapsed after a severe market downturn, including FTX and Celsius.

The hedge fund has a prominent presence in the industry and has significant investment stakes in projects such as LUNA, Aave, Avalanche, BlockFi, Deribit, and Solana. At its peak, the company managed about $18 billion in digital assets.

The company’s decline was caused by imperfect risk management protocols and imprudent trading due to excessive greed.

After the collapse, the Singapore authorities banned Su Zhu and Kyle Davies for nine years for violating the country’s Securities and Futures Act 2001 (SFA) Securities and Futures (Business Licensing and Conduct) Regulations (SFR). In addition, the regulator said 3AC failed to inform it of its appointment of Cheong Jun Yoong Arthur as its portfolio manager and misrepresented his employment status.

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