Analysis Su Zhu arrested, April detention period may be extended

Su Zhu arrested, April detention period may be extended.

Author: Qin Xiaofeng

12 hours ago, Su Zhu, co-founder of Three Arrows Capital (3AC), used Chinese to send “Happy Mid-Autumn Festival” greetings to all his fans on the X platform (formerly Twitter). A few hours later, the gears of fate began to turn and he found himself in prison.

At 10 p.m. Beijing time on the 29th, The Business Times reported that Su Zhu was arrested at Changi Airport in Singapore when he attempted to leave the country this afternoon.

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According to the report, Teneo, the liquidator of 3AC, applied for an arrest warrant for Su Zhu on September 25th, as he deliberately failed to comply with a court order to cooperate with the liquidator’s investigation and explain his activities during his tenure at 3AC. The court ultimately approved the application and arrested Su Zhu today, sentencing him to four months in prison.

During Su Zhu’s imprisonment, the liquidator will continue to contact him, with the focus on recovering 3AC’s assets. Teneo can also apply for further court orders as needed (note: it is not ruled out that the imprisonment may be extended further).

“Throughout the process, the liquidator’s primary task is to recover 3AC’s assets and maximize the return to the creditors,” Teneo added. Kyle Davies, another co-founder of 3AC, was also sentenced to four months in prison, but his whereabouts are currently unknown.

Previously, a U.S. court had requested Kyle Davies to appear and respond, but he refused. He stated that he gave up his U.S. citizenship and became a permanent resident of Singapore when he got married in 2017, as Singapore does not allow dual citizenship and he is not subject to the jurisdiction of the U.S. court. If Kyle Davies, as a Singapore citizen, continues to ignore the arrest warrant issued by the Singapore court, he may be found in contempt of court, have his passport frozen, and other coercive measures may be taken.

The issue of non-cooperation with the liquidator’s investigation has been a central part of the bankruptcy liquidation process of 3AC. At the beginning of the liquidation in July 2022, Zhu Su appointed a lawyer to explain that the reason for his non-cooperation was that the relevant documents were not submitted in a timely manner, which he regarded as “fishing behavior” intended to provoke him, and he and his family had also received death threats. Therefore, he and Kyle Davies will only focus on dealing with inquiries from the Monetary Authority of Singapore in the future and provide more detailed data on 3AC’s assets. However, based on today’s liquidator’s application for a court arrest warrant, it seems that Su Zhu did not fulfill his previous commitments.

With Su Zhu’s arrest today, the price of Keys on the decentralized social platform friend.tech dropped from 0.961 ETH to 0.63 ETH, a decline of over 30%. In addition, OPNX, the crypto claims and trading platform founded by Su Zhu, was also affected. Market data shows that the price of OX, the platform’s token, plummeted from 0.024 USDT to 0.011 USDT, and is currently trading at 0.012 USDT, with a one-hour decline of 50%.

About OPNX, crypto analyst Loris has previously stated that its volume and price fluctuations are abnormal and there may be false trading. Odaily Star Daily has also written an analysis, pointing out that its LaunchLianGuaid project is basically a “three-no” project, just to boost the price of the platform token OX. Recommended reading: “IEO of the ‘three-no’ project, OPNX’s LaunchLianGuaid, who is being fooled?”.

Two weeks ago, the Monetary Authority of Singapore (MAS) issued a statement imposing a nine-year ban on Su Zhu and Kyle Davies, the founders of 3AC, prohibiting them from engaging in any regulated activities. According to the Securities and Futures Act, the two are also prohibited from managing any capital market services company, serving as directors, or becoming major shareholders.

The MAS accused 3AC of providing false information and failing to implement proper framework risk management systems. Loo Siew Yee, Assistant Managing Director of MAS responsible for policy, payment and financial crime, stated in the declaration that MAS takes a serious view of Su Zhu and Kyle Davies openly disregarding MAS’s regulatory requirements and their dereliction of duty.

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