Su Zhu of Three Arrows Capital Under Scrutiny in Singapore Court

• Repercussions of Three Arrows Capital's Collapse
• Zhu's Investigation and Imprisonment
• Three Arrows Capital Liquidation Drama
• Legal Proceedings and Potential Recoveries
• Claim Disputes and Future Implications

Repercussions of Three Arrows Capital's Collapse

The fallout from the collapse of Three Arrows Capital continues to make waves in the cryptocurrency sector. Su Zhu, one of the founders, recently faced questioning in a Singaporean court. Managed by Teneo liquidators, this two-day hearing is a key step in their mission to recover billions in lost investments and gain essential details about the hedge fund's demise.

Zhu's Investigation and Imprisonment

During the hearing, liquidator-appointed lawyers questioned Zhu about various factors, including the reasons behind the fund's failure and the current location of its assets. This interrogation followed Zhu's arrest at Singapore airport on September 29, leading to a four-month sentence for his refusal to aid in the dissolution of Three Arrows Capital. Zhu's release is expected this month, assuming good behavior.

Three Arrows Capital Liquidation Drama

Initiated in 2022 by poorly-timed leveraged bets, the liquidation of Three Arrows Capital contributed to a $2 trillion downturn in the cryptocurrency market. This situation triggered a series of collapses across the industry. Liquidators have alleged that Zhu and co-founder Kyle Davies have not adequately cooperated with their investigation. The hunt for a $1.3 billion recovery from the pair is ongoing, with Teneo estimating creditors are collectively owed around $3.3 billion.

Legal Proceedings and Potential Recoveries

The ongoing legal disputes between Zhu and Teneo are categorised as a civil issue. In this situation, neither Zhu nor Davies face criminal charges in Singapore. The information from the court's questioning will be disseminated to creditors, aligning with the broader objective of maximizing recoveries, according to sources familiar with the situation.

Claim Disputes and Future Implications

In previous statements, Zhu declared that he and Davies had made cooperative efforts, arguing that their endeavours met with resistance. However, claims by Davies and Zhu's legal counsel, dismissing court orders obtained by the liquidators as baseless, have been highlighted through correspondence submitted to a New York bankruptcy court by the liquidators. This ongoing legal drama adds another layer of complexity to the aftermath of Three Arrows Capital's collapse, gripping stakeholders and industry observers as events progress.

Edited by Jonathan Stoker