- The Three Arrows Capital co-founder Su Zhu was arrested at Singapore Changi Airport while attempting to leave the country.
- The Singapore Court released committal orders to 3AC co-founders Zhu and Davies for not complying with the liquidation investigation.
- Liquidator Teneo alleges the co-founders of not cooperating with the liquidators’ endeavor for asset recovery.
Su Zhu, the co-founder of the bankrupt crypto hedge fund Three Arrows Capital, was reportedly arrested at Singapore Changi Airport while attempting to leave the country following the Singapore Court’s committal order. As per the company’s liquidator, Teneo, the court issued committal orders for both Zhu and 3AC’s other co-founder, Kyle Davies, revealing the court’s decision to sentence both to four months of imprisonment for not complying with the investigation on liquidation.
In July 2022, following the severe crypto winter, 3AC collapsed, falling into liquidation. Consequently, while liquidators were trying to recover more than $1 billion from the company, 3AC filed for Chapter 15 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York, seeking legal support to manage creditors.
A subsequent report revealed that the liquidators alleged 3AC co-founders of not cooperating with asset recovery and failing to reimburse customer funds. Adam Goldberg, an attorney representing liquidators, asserted that Zhu and Davies are more indulged in sustaining the company’s reputation than promoting asset recovery.
Per the liquidator’s allegations, the company co-founders were involved in a long tussle with Teneo, the public relations company. The firm added that their active participation in social media networks was contradicting their lack of cooperation with the liquidators, citing,
Kyle Livingstone Davies and Su Zhu (together, the ‘Founders’) — both of whom have maintained a particularly active social media presence in the wake of the failure of their company — have failed to offer forthright cooperation. All the while, Mr. Davies has continued to post on his Twitter account, openly ignoring the Court’s directives and enjoying media attention while he continues to thwart efforts by [liquidators] to gain access to documents and information.
Pointing out the liquidators’ urgency in recovering funds, Teneo stated that they had requested the court to issue the committal order compelling 3AC’s co-founders to adhere to the liquidators’ requirements. As per their plan, the liquidators would engage with Zhu and Davies during their confinement, seeking their cooperation for further recovery procedures. Teneo added, “Throughout the process, the liquidators’ priority has been recovering the assets of 3AC and maximising returns for its creditors”.
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