Su Zhu, the co-founder of the notorious hedge fund Three Arrows Capital, has appeared in a series of clips from an upcoming podcast with Kyle Davies, explaining why serving a nearly three-month-long prison sentence in Singapore was an "enjoyable experience overall."
Among Zhu’s favourite aspects were the healthy food, time to read whatever he wanted, do push-ups, and apparently get the best sleep of his life - lying on the ground without a mattress allegedly decompressed his spine. He praises the prison structure and compares it to a family environment with "parents strict enough to give you love." Zhu also claims that imprisonment helped him to recover from internet addiction, cure his eyesight and clear his mind.
“All the things they allow you to do still in prison are the things that, like in the ancient days, would still be considered entertainment, right?… It’s a really magical feeling, you feel a kinship with your ancestors. This is how I was supposed to live.” - Su Zhu said.
It is worth mentioning that apart from attention-grabbing phrases about the luxuries of being behind bars, the podcast also touches on deeper philosophical questions about prison itself and the people detained there.
3AC’s collapse was one of the most substantial hedge-fund trading losses of all time. According to bankruptcy filings, the company faces $3.5 billion in creditor claims. The hedge fund was founded by Kyle Davies and Su Zhu back in 2012, but faced a severe liquidity crisis after the Terraform Labs’ crash in early 2022. The company operated out of Singapore but filed for bankruptcy in the British Virgin Islands and was liquidated in June 2022 by a local court order, with Teneo appointed as liquidator. The company’s fall triggered a downward spiral in the crypto market, hitting many crypto investors and companies, including Voyager Digital, Celsius, Genesis, BlockFi and FTX.
At the time, Zhu and Davies simply disappeared, reportedly going to Bali, Indonesia. According to court liquidation papers and Teneo’s statements, neither has been cooperating in the liquidation process of 3AC. While hiding in the real world, Zhu and Davies remained publicly active online. Last April, they started another cryptocurrency-related venture, OPNX, which allows the trading of bankruptcy claims and the use of these as portfolio margins.
Su Zhu later returned to Singapore and was arrested last September while trying to leave the country. Davies' whereabouts remain unknown, but he is subject to the same committal order as his colleague. Zhu was sentenced to four months in prison for failing to cooperate with the liquidators but was released earlier for good behaviour. Before that, he was questioned by the court, which reportedly insisted that Zhu respond to Teneo's lawyers, who were seeking the details of the 3AC collapse and the whereabouts of assets.
The liquidators believe that the founders should be held responsible for the collapse, and Teneo is seeking to recover $1.3 billion directly from the pair. In connection with this, a British Virgin Islands court froze over a billion dollars of co-founders Kyle Davies and Su Zhu’s assets last December. They are both also subject to a domestic freezing order from a Singapore court.
While it is good to know that Singaporean prisons are top-notch, and Zhu enjoyed a nice vacation there, Zhu hasn’t faced any other criminal charges in Singapore, and the sentence feels perhaps unfairly soft. His fellow fallen crypto moguls, including SBF, CZ and Do Kwon, are facing much more severe punishments for similar mistakes. It is likely that creditors, liquidators and authorities will continue trying to call the cheerful founders to account.
