hree Arrows Capital (3AC) was once a prominent crypto hedge fund but suffered massive losses during the cryptocurrency market crash of mid-2022. Heavy exposure to bankrupt crypto exchange FTX led to 3AC becoming insolvent as well.
The hedge fund's inability to meet margin calls worth hundreds of millions of dollars triggered involuntary liquidation proceedings by disappointed creditors. Co-founders Kyle Davies and Su Zhu found themselves at the centre of legal turmoil as authorities in Singapore, 3AC's base of operations, sought to hold the executives accountable.
Zhu Takes the Fall
In September 2023, Su Zhu was apprehended by Singaporean officials at the city-state's airport for contempt of court amid allegations that 3AC's leadership failed to cooperate with the mandated liquidation process. Zhu was sentenced to four months imprisonment but released early in December based on standard rules around prisoner behaviour.
His arrest brought the 3AC saga into the international spotlight and indicated Singapore was serious about enforcing financial regulations, even against high-profile crypto figures.
Davies Dodges Responsibility
While speaking on the Unchained podcast in March 2024, Kyle Davies made it clear he has no regrets over 3AC's bankruptcy. However, as the article outlines, key issues remain unaddressed by Davies regarding creditors' claims against 3AC assets as well as potential legal troubles for himself in Singapore once the market turmoil subsides.
Davies said he wouldn't return to Singapore "immediately" but hinted at anticipated resolutions through settlements. Yet without more transparency into the liquidation and his cooperating with authorities, serious outstanding questions persist around properly compensating 3AC's creditors eight months on from the hedge fund's collapse.
