Three Arrows Capital (3AC) founder Su Zhu is facing questions from lawyers representing the firm's executors in a Singapore court seeking to recover billions of dollars in wealth from the bankruptcy fund.
Citing sources familiar with the private process, Bloomberg reported that Teneo's lawyers questioned Zhou about how 3AC's liquidation of the crypto hedge fund failed and its billions in assets. The liquidators are seeking $1.3 billion from Zhu and 3AC founder Kyle Davis, with creditors owed a total of about $3.3 billion.
Zhou was arrested in September for defying a court order requiring him to account for his activities as 3AC's founder and investment manager. In September, he was sent to prison for not cooperating with the investigation. Per Bloomberg, it is due to be released this month under formal provisions for good behavior.
Today's court cases are more civil than criminal; Zhou and Davies have not faced criminal charges in Singapore over the 3AC collapse. In September, the pair was banned from financial activities by the Monetary Authority of Singapore (MAS), which accused 3AC of failing to implement an appropriate risk management framework for its crypto trading activities.
3AC was dissolved in May 2022 after accumulating millions of dollars in losses following the collapse of the TerraUSD algorithmic stablecoin, which resulted in crypto exchanges depleting the fund's position as the fund was unable to meet margin calls. The Singapore-based hedge fund was ordered to liquidate in June 2022 before filing for bankruptcy next month.
In April 2023, Zhou and Davis launched a new exchange called OPNX to trade bankruptcy claims before launching a new VC fund, 3AC Ventures, in June.
Edited by Stacy Elliott.
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