As the repercussions of Three Arrows Capital’s collapse echo through the crypto industry, co-founder Su Zhu has entered the legal light in a Singapore court for the first time. The two-day court hearing, directed by liquidators from Teneo, signifies a critical point in their endeavors to reclaim billions of dollars in lost funds and gather crucial insights into the hedge fund’s downfall.
In the recent proceedings, attorneys representing the liquidator probed Su Zhu on various aspects. It delves into the circumstances leading to the fund’s failure and seeks information about the current location of its assets. The court-sanctioned questioning unfolded following Zhu’s arrest at Singapore’s airport on Sept. 29, resulting in a 4-month imprisonment due to his failure to cooperate with the task of winding up Three Arrows. Zhu is expected to be released this month based on standard provisions for good behavior.
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Su Zhu’s Court Hearing
Dressed in a slim suit, Su Zhu made a rare appearance in the High Court, acknowledging the questioning. His legal representative refrained from commenting on the ongoing proceedings, while the court and the prison service remained tight-lipped.
The liquidation saga of Three Arrows Capital, set in motion in 2022 by ill-fated leveraged bets, played a role in a $2 trillion cryptocurrency market downturn. It further started a series of collapses in the sector. Liquidators have leveled accusations against Su Zhu and the fund’s co-founder, Kyle Davies, citing inadequate cooperation with their investigation. The pursuit to recover $1.3 billion from both individuals is underway. Teneo estimates creditors are owed around $3.3 billion collectively.
The ongoing legal proceedings between Su Zhu and Teneo are tagged as a civil matter. Here, neither Zhu nor Davies are facing criminal charges in Singapore. The insights gathered from the court’s questioning will be shared with creditors. This further aligns with the overarching goal of maximizing recoveries, according to sources close to the matter.
In prior statements, Su Zhu noted the cooperative efforts he and Kyle Davies exerted, contending that their attempts were met with resistance. Correspondence submitted to a New York bankruptcy court by the liquidators shed light on assertions by counsel to Davies and Zhu, dismissing court orders obtained by the liquidators as “baseless.” The evolving legal saga introduces further complexity to the aftermath of Three Arrows Capital’s collapse. It holds the attention of stakeholders and industry observers as developments unfold.
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