Su Zhu, founder of cryptocurrency fund Three Arrows Capital, was arrested on Friday in Singapore while trying to leave the country, the company’s liquidators said.
Mr Zhu, 36, was arrested at Changi Airport, liquidators said. On Monday, a Singapore court issued what are known as “prosecution” orders for Zhu and another Three Arrows founder, Kyle Davies, sentencing the pair to four months in prison after they failed to cooperate with liquidators investigating their failed hedge fund. Davies’ whereabouts are unknown, according to Teneo, the firm that is working on liquidating the fund.
Last summer, Three Arrows, which is based in Singapore and managed $4 billion at its peak, filed for bankruptcy after cryptocurrency markets plunged. When the fund collapsed, a large part of the industry was dragged down with it. The resulting crisis depleted the savings of millions of amateur investors and sank other bankrupt companies.
Mr. Zhu is the latest cryptocurrency executive to be arrested after the cryptocurrency market crashed last year.
In December, Sam Bankman-Fried, founder of the FTX cryptocurrency exchange, was arrested in the Bahamas and later charged with orchestrating a wide-ranging fraud involving his company. His criminal trial begins Tuesday in federal court in Manhattan.
In March, Do Kwon, founder of crypto company Terraform Labs, was arrested in Podgorica, the capital of Montenegro, as he and a fellow traveler attempted to board a private flight to Dubai, United Arab Emirates. He has also been accused of fraud.
A lawyer for Mr. Zhu did not immediately respond to a request for comment.
In a statement, Teneo said it would “seize every opportunity” to ensure Mr Zhu “fully complies with the court order issued against him for the provision of information and documents” related to Three Arrows during his imprisonment.
After the collapse of Three Arrows, Mr Zhu and Mr Davies denied any wrongdoing and went on a trip. Davies spent time in Spain, Bali and elsewhere. Mr. Zhu played video games and I found a surf instructor. In April, they unveiled a new business, Open Exchange, a marketplace for investors who had lost money during last year’s crypto implosions.
The Monetary Authority of Singapore, a regulator that reprimanded Three Arrows last June, banned Zhu and Davies from conducting regulated investment activities for nine years, starting September 13, the liquidators added.
