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Crypto hedge fund Three Arrows Capital co-founder nabbed at Changi Airport

An order granted by the Singapore courts has sentenced Zhu Su to four months in jail. PHOTO: ZHU SU/TWITTER

SINGAPORE – The co-founder of bankrupt cryptocurrency hedge fund Three Arrows Capital has been arrested at Changi Airport and is looking at a four-month jail term.

Teneo, the joint liquidators of Three Arrows, on Friday confirmed that Mr Zhu Su was apprehended on Friday afternoon for attempting to travel out of Singapore following a committal order granted by the Singapore courts against him.

Teneo had applied for and obtained the order against Mr Zhu on Monday “as a consequence of his deliberate failure to comply with a court order” that compelled him to cooperate with the liquidators’ investigations.

The order granted by the Singapore courts sentenced Mr Zhu to four months in jail.

A similar order has been granted against Three Arrows’ co-founder Kyle Davies, who also was sentenced to four months in jail but his whereabouts are unknown.

Both Mr Zhu and Mr Davies are aged 36 and Singapore citizens.

Teneo said Mr Zhu will be held in prison for four months, during which it seeks to engage him on matters relating to the failed hedge fund, including recovery of assets that are property of the firm or acquired using the firm’s funds.

Two weeks ago, the Monetary Authority of Singapore said the two men were issued prohibition orders that banned them for nine years from taking part in the management, acting as a director or becoming a substantial shareholder of any regulated capital market services company here.

Under the ban, which took effect on Sept 13, the duo cannot perform any regulated activity under the Securities and Futures Act 2001 (SFA).

The arrest comes more than a year since Three Arrows filed for bankruptcy.

The hedge fund was among the most prominent crypto firms to have collapsed in 2022, when billions of investors’ assets were wiped out from the market following a string of high-profile crashes.

Creditors claim Three Arrows owes up to US$3.5 billion (S$4.8 billion), and liquidators are seeking to recover around US$1.3 billion from Mr Zhu and Mr Davies, who allegedly racked up the losses when the company was already insolvent.