3AC co-founder Su Zhu probed in Singapore court over fund’s collapse

Su Zhu, co-founder of Three Arrows Capital (3AC), reportedly faced his first court questioning in Singapore court regarding the firm’s collapse.

Su Zhu the co-founder of the defunct Three Arrow’s (3AC) capital has made a court appearance in Singapore spanning two days this week that is part of a wider net of legal proceedings initiated by Teneo, the appointed liquidator of his company’s assets, Bloomberg has reported.

The court session, held under private terms, was primarily focused on unraveling the circumstances leading to the fund’s failure and locating the remaining assets.

Earlier, a Singapore court had approved the questioning of Zhu following his arrest at a Singapore airport on Sep. 29.

Zhu was detained for four months for not cooperating with the liquidation process of 3AC. He is expected to be released imminently, with the court considering standard provisions for good behaviour.

3AC, once a prominent player in the crypto hedge fund space, faced a dramatic downfall after the crash of Terra’s LUNA in 2022. At the time of declaring bankruptcy in July, the firm owed approximately $3.5 million to its creditors.

Post-bankruptcy, the fund’s management reportedly evaded court summons, preferring to engage in online disputes with the liquidators instead. Some creditors have accused the company of misleading investors and engaging in fraudulent activities.

On Sep. 14, the Monetary Authority of Singapore (MAS) issued a nine-year prohibition order against the founders of 3AC.

The order, resulting from violations of several securities laws, including the Securities and Futures Act 2001 (SFA) and Securities and Futures (Licensing and Conduct of Business) Regulations (SFR), effectively bars the founders from participating in any regulated activity or holding management positions in any capital market entities governed by the SFA.