the money game

Crypto Fugitive Su Zhu Has Been Arrested

Photo: CoinDesk/YouTube

Su Zhu, the co-founder of bankrupt crypto hedge fund Three Arrows Capital, was arrested Friday afternoon at Changi Airport in Singapore. He had been trying to leave the country when he was detained, according to Teneo, which is overseeing the liquidation of the collapsed fund known as 3AC.

Zhu has been sentenced to prison for four months, along with his co-founder Kyle Davies, after a ruling by the Singapore Courts that said the cryptocurrency investors had failed to cooperate with the liquidators investigating the fund’s blowup and addressing billions of dollars’ worth of creditors’ claims. The Singapore authorities are also seeking to arrest Davies, “but his whereabouts remain unknown at this point in time,” Teneo said in a statement. “The committal order against both Mr. Zhu and Mr. Davies directs any police officer to arrest them and to bring them safely to be imprisoned for four months.”

Friends who met at an elite Massachusetts private school before going on to the Ivy League, Zhu and Davies were once regarded in the industry as “genius” cryptocurrency investors who made bold, bullish predictions on Twitter and on podcasts. At the height of 3AC’s success on the back of soaring bitcoin prices in 2021, the pair ordered a superyacht they planned to call Much Wow — though they ran out of money to pay the rest of the bill for it. (Now, the liquidators are hoping to recover $30 million from the yacht’s sale.)

For months after 3AC collapsed in June 2022, Zhu and Davies had been on the lam, ignoring pleas from lenders and creditors to whom they owed money, as well as their own liquidators. But in November, the duo suddenly reemerged on Twitter just minutes after the collapse of an even bigger crypto institution, FTX. FTX’s failure seemed to embolden Zhu and Davies, who, without clear evidence, blamed the fallen crypto exchange for accelerating their own downfall.

Still, even after resurfacing (detailing time spent surfing and painting while traveling in Asia), they refused to work with the liquidators, who eventually subpoenaed them on the social-media site then known as Twitter after other methods to reach them were unsuccessful.

A lawyer for the liquidators said last year that Zhu and Davies had demonstrated “a deliberate pattern of evasion” in providing documents and information needed for the investigation; once, they skipped a liquidation hearing while one of them appeared to be “tweeting from a boat in Dubai,”  according to a Teneo executive leading the liquidation.

In April, Zhu and Davies launched a new crypto exchange called OPNX for trading creditor claims of the various bankrupt crypto entities (including their own), though it has already faced controversy as well as regulatory fines in Dubai.

“You can crash on a big wave. It doesn’t matter. You can injure yourself and just heal, and get the next one,” Zhu told the New York Times this spring, while also insisting that legally, 3AC was “whiter than white.”

Zhu’s arrest marks the latest in a string of moves that has put a significant number of crypto’s most celebrated figures behind bars. In March, Do Kwon, the man behind once-hot crypto project luna (which went to zero last year), was arrested in Montenegro with a fake passport as he tried to board a private plane. Arthur Hayes, the co-founder of BitMEX, finished a six-month house-arrest stint in Miami earlier this year. And Sam Bankman-Fried, the former CEO of FTX who had been under house arrest since late last year, is currently in prison after his bail was revoked ahead of a sweeping fraud trial set to begin next week.

Crypto Fugitive Su Zhu Has Been Arrested