Su Zhu, the Co-Founder of Three Arrows Capital (3AC), has been arrested in Singapore. His arrest is linked to his alleged failure to cooperate during the bankruptcy proceedings of 3AC, a crypto-lending company that collapsed last year.

This afternoon (Friday) at Changi Airport in Singapore, Zhu was apprehended. His attempt to leave the country led to his detention, which was a development confirmed by Teneo, the entity overseeing the liquidation of 3AC.

3AC was known for its investments in projects like LUNA, Aave, Avalanche, BlockFi, Deribit, and Solana before its collapse. The downfall began when LUNA, a significant investment of 3AC, experienced a massive crash in May, triggering a series of events in the crypto industry.

Breaking: ZHU Su, co-founder of failed crypto hedge fund Three Arrows Capital, was apprehended at Changi Airport whilst attempting to travel out of Singapore on Friday (Sep 29) afternoon. Businesstimes reported. https://t.co/W01HoeQYCu pic.twitter.com/TwvRuFKbxw

— Wu Blockchain (@WuBlockchain) September 29, 2023

Zhu Wanted for Eluding Authorities

Despite managing up to $18 billion in cryptocurrency assets at its peak, 3AC failed to meet margin calls in June, raising questions about its financial stability. In addition, the failure to repay a substantial debt of $665 million to crypto broker Crypto Broker A crypto broker is a dealer that facilitates the direct exchange of cryptocurrencies for other assets between two parties in over-the-counter trading. If you want to trade Bitcoin off of an exchange, the broker is the entity that matches you with another trader. Cryptocurrency brokers are usually involved in high-volume trades. Crypto holders who want to buy, sell, or trade large amounts of Bitcoin may not want to do so on a cryptocurrency exchange because a possible lack of liquidity. In other A crypto broker is a dealer that facilitates the direct exchange of cryptocurrencies for other assets between two parties in over-the-counter trading. If you want to trade Bitcoin off of an exchange, the broker is the entity that matches you with another trader. Cryptocurrency brokers are usually involved in high-volume trades. Crypto holders who want to buy, sell, or trade large amounts of Bitcoin may not want to do so on a cryptocurrency exchange because a possible lack of liquidity. In other Read this Term Voyager Digital exacerbated the situation and further destabilized the company.

The Monetary Authority of Singapore (MAS) reprimanded 3AC and its founders in June 2022. This reprimand was due to alleged misinformation, failure to report ownership changes in the executive ranks, and exceeding allowable asset thresholds for a registered fund management company.

According to the MAS, the investigations uncovered that the company failed to notify regulators about the employment of its representatives and made false representations about them.

In June, a report by the New York Times indicated that Kyle Davies, the Co-Founder of 3AC, and Zhu had embarked on a year-long journey that took them to Bali instead of facing the aftermath of the collapse of their hedge fund. They departed from Singapore, where Three Arrows was headquartered, and embarked on a journey across Asia, essentially taking a summer sabbatical.

3AC's Downfall and Regulatory Reprimand

Meanwhile, Singapore's financial market regulator barred the duo from participating in the city-state's financial services sector for nine years in September. The ban was put into effect on September 13 in response to the regulatory which had reported lapses tied to the fund's operations.

Founded in 2012 in Singapore, 3AC was once a prominent cryptocurrency hedge fund known for its highly leveraged positions. However, its fortunes took a sharp downturn, incurring losses exceeding $400 million amid a drop in the crypto market last year.

The consequences of 3AC's collapse extended far beyond its immediate stakeholders. Voyager Digital, unable to recover its debts from 3AC, was forced to file for bankruptcy Bankruptcy Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Read this Term. The domino effect has resulted in damages exceeding $3 billion, affecting several companies in the crypto space.