But when the fund suffered big losses in 2022 owing to a series of ill-fated bets on Luna tokens and other investments, Mr Zhu and his co-founder Kyle Davies went into hiding, leaving creditors owed around $3 billion.
After an extended absence from social media and months of speculation about their whereabouts, they resurfaced saying they were helping to launch OPNX, a platform for tokenised versions of bankruptcy claims, including those associated with bankrupt crypto exchange FTX.
On X, formerly known as Twitter, Mr Zhu and Mr Davies started posting photos and conducting media interviews from locations including Thailand, Bali, Spain and Malaysia.
All the while, Mr Zhu and Mr Davies were engaged in a months-long fight with Teneo, the company appointed to unwind Three Arrows, with each accusing the other of failing to co-operate.
“Kyle Livingstone Davies and Su Zhu [together, the ‘founders’] – both of whom have maintained a particularly active social media presence in the wake of the failure of their company – have failed to offer forthright co-operation,” Teneo wrote in a February filing.
“All the while, Mr Davies has continued to post on his Twitter account, openly ignoring the court’s directives and enjoying media attention while he continues to thwart efforts by [liquidators] to gain access to documents and information,” Teneo said in the filing.
Mr Zhu and Mr Davies, for their part, have accused Teneo of not engaging constructively to return funds to creditors. Friday’s arrest brought matters to a head.
Mr Zhu, who said he was worried about going to jail, was detained at Changi Airport as he tried to leave Singapore for failing to comply with a court order compelling him to co-operate with Teneo.
The company said it had received a committal order sentencing both Mr Zhu and Mr Davies to four months in prison.
Teneo is seeking to recover more than $1 billion directly from the two men.
Neither Mr Zhu nor Mr Davies responded to requests for comment.
Singapore’s financial regulator had already banned the pair from conducting regulated activity in the city-state for nine years.
Mr Davies’ whereabouts is unclear. His lawyers did not return a request for comment. Singapore police were approached for comment.
Mr Zhu’s arrest is only the latest in a string of legal interventions against alleged wrongdoing in crypto, following a series of high-profile business collapses and fraud scandals that wiped out trillions of dollars in market value last year.
FTX co-founder Sam Bankman-Fried was arrested in the Bahamas in December and is scheduled to go on trial in New York on October 3.
Ex-Celsius chief executive Alex Mashinsky was arrested in July. Do Kwon, who created the collapsed Terra stablecoin and the associated Luna token that helped bring down Three Arrows, is in custody in Montenegro, accused of forging identity documents. All three men have denied the allegations against them.
Singapore is not the only jurisdiction to have take action against the former hedge fund managers.
Dubai’s cryptocurrency regulator fined the pair along with OPNX’s management in May for failing to abide by its rules for marketing, advertising and promotions.
Sam Bankman-Fried – in photos
After Mr Zhu’s arrest, the OX token associated with the OPNX platform traded as much as 40 per cent lower at around $0.013. The token hit an all-time high of $0.077 in August, according to CoinGecko data.
In the US, which has brought pressure on cryptocurrency at both the federal and state level, authorities have been probing whether Three Arrows misled investors and failed to register with local agencies, reports said in October.
Teneo said it will seek to engage with Mr Zhu on matters relating to Three Arrows and recovering lost funds while he is in prison.
The estate has been steadily auctioning and selling off Three Arrows’s assets to raise funds for creditors, including an attempted $30 million sale of the co-founders superyacht, the Much Wow.