In a recent turn of events, Su Zhu, a co-founder of the now-bankrupt Three Arrows Capital, faced arrest in Singapore. This event marks another chapter in the downfall of prominent figures from the previous crypto industry boom.
The 36-year-old Singaporean co-founder, Su Zhu, was apprehended at Changi Airport while attempting to leave the country. Singaporean courts had issued a "committal order" against him on September 25, citing his deliberate failure to cooperate with Teneo, the court-appointed joint liquidators overseeing Three Arrows Capital Ltd.'s bankruptcy. As a consequence, Zhu was sentenced to four months' imprisonment. A similar order was granted for the other co-founder of Three Arrows, Kyle Davies, whose whereabouts are currently unknown.
Earlier this month, the Monetary Authority of Singapore barred both Zhu and Davies from engaging in regulated investment activities for a period of nine years.
Su Zhu, along with Kyle Davies, started Three Arrows Capital in 2012 after graduating from Columbia University and working as derivatives traders for Credit Suisse. Zhu gained attention in the crypto industry by accurately predicting the end of the "crypto winter" in 2018 when Bitcoin was trading below $4,000. This prediction boosted his reputation as a crypto markets expert.
In February 2021, as Bitcoin's price exceeded $30,000, Zhu introduced the crypto "supercycle" thesis, suggesting that Bitcoin would continue to rise without facing another bear market until it matched the market capitalization of gold. By April of the same year, he claimed that Three Arrows' assets under management had reached the "multi-billion" dollar range.
However, the tide turned in late June 2022 when Three Arrows filed for bankruptcy due to substantial losses resulting from the collapsed algorithmic stablecoin protocol, Terra. Following the bankruptcy filing, both Zhu and Davies left the jurisdiction of the US. In June of the following year, they launched OPNX, an online platform enabling investors to trade bankruptcy claims from crypto companies, including those associated with Three Arrows Capital.
Su Zhu is among several prominent figures in the crypto industry who have faced legal actions following the collapse of businesses and fraud scandals, resulting in a significant decline in cryptocurrency prices. Notable cases include the New York state lawsuit against Alex Mashinsky, the former CEO of Celsius Network, and the arrest of Do Kwon, CEO of Terraform Labs, on multiple counts of fraud in Montenegro. Additionally, FTX exchange founder Sam Bankman-Fried is currently awaiting trial in jail in Manhattan, with proceedings scheduled to commence on October 2nd.
Inspirer by: David Hollerith Senior Reporter at Yahoo Finance