Zhu Su, co-founder of the now-bankrupt Three Arrows Capital (3AC), has been apprehended in Singapore, according to a tweet by online news aggregator db, known as @tier10k on X, and later confirmed by Three Arrows’ liquidator, Teneo.

According to the liquidator, Zhu’s arrest and sentence stems from his failure to cooperate during 3AC bankruptcy proceedings. His partner and 3AC co-founder. Kyle Davies, is also wanted by Singaporean authorities but has not yet been apprehended.

Downfall

3AC’s downfall was a shocking event in the crypto industry, given its prominent position and substantial investment stakes in projects such as LUNA, Aave, Avalanche, BlockFi, Deribit, and Solana. The company’s lack of a robust risk management framework, coupled with reckless dealings and a significant degree of greed, set the stage for its collapse, according to an analysis by CryptoSlate.

The chain reaction leading to 3AC’s collapse was set off when LUNA, a major investment of the firm, experienced a crash in May. Despite managing approximately $18 billion in crypto assets at its peak, 3AC failed to meet its margin calls in June, leading to speculation about the firm’s financial status. Subsequently, the failure to repay borrowed money from crypto broker Voyager Digital, totaling $665 million, led to further destabilisation in the industry.

The Monetary Authority of Singapore (MAS) played an instrumental role in bringing light to the firm’s murky dealings. In September, MAS issued a nine-year prohibition order against 3AC founders Zhu Su and Kyle Davies. MAS’s investigation revealed that 3AC had failed to inform the regulator about the appointment of Cheong Jun Yoong Arthur as its portfolio manager and had misrepresented his employment status. These actions, in addition to an inadequate risk management framework, were attributed to the failures of Zhu and Davies in fulfilling their duties.

3AC’s collapse had far-reaching effects, impacting not just its stakeholders but also other companies in the industry. Voyager Digital was forced to file for bankruptcy due to the lack of repayment from 3AC. The cascade of events led to damages totaling more than $3 billion, affecting 27 companies in total.