Su Zhu, one half of the Three Arrows Capital (3AC) founding duo, is set to be released this month and questioned by the collapsed hedge fund’s liquidators in a bid to recover lost billions, a new report has revealed.
Zhu was arrested on September 29 at the Changi Airport in Singapore as he attempted to leave the country. Singaporean authorities issued the arrest warrant over Zhu’s refusal to cooperate with Teneo, the New York-based financial company appointed to liquidate 3AC. He was then sentenced to four months in prison.
Zhu is set to be released this month on good behavior standards, reports Bloomberg, citing sources privy to the information who asked not to be named as the information is private.
Breaking 🚨
🙄 Three Arrow Capital (3AC) founder Zhu Su is set to release this month for good behaviour.
◾️The two-day court hearing required Zhu to respond to lawyers for liquidator Teneo with details on how the fund failed and the whereabouts of the assets. pic.twitter.com/ClXDOa3R44
— Elja (@Eljaboom) December 13, 2023
The disgraced hedge fund founder also appeared in court last week to respond to questions from Teneo’s legal team. The liquidators have been pursuing Zhu and Kyle Davies to recover over $1.3 billion. 3AC sank with over $3.3 billion in investors’ funds.
Teneo’s questions sought details on how the two founders operated the fund, what led to its downfall last year, and the assets they hold.
Despite his short prison stint, Zhu hasn’t been charged criminally in Singapore, and the liquidation proceedings remain a civil matter. However, the Monetary Authority of Singapore (MAS) banned Zhu and Davies from regulated financial activities for nine years. MAS accused the two of failing to provide sufficient risk management programs and of providing false information to investors and regulators.
Before he was arrested for failing to cooperate with the liquidators, Zhu had maintained that he tried working with Teneo, but “our good faith to cooperate with the liquidators was met with baiting.”
3AC was the first domino to fall after the implosion of the Terra ecosystem, where it had placed outsized bets. Like many other exchanges that have since crashed, including Celsius Network, Genesis, and FTX, the hedge fund was riding on the bullish waves and had little regulatory oversight to cover up the cracks. When the music stopped, 3AC quickly crumbled and kicked off a wave of bankruptcies whose effects are still felt today.
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