SU ZHU
Co-founded Three Arrows Capital and caused crypto's biggest hedge fund collapse
Ran Three Arrows Capital — at its peak a $10 billion crypto hedge fund — into the ground in one month. Su Zhu and co-founder Kyle Davies borrowed billions, went long on everything, and when crypto crashed in June 2022, they couldn't meet margin calls. The fund defaulted on $3.5 billion in loans. Creditors lost everything. Zhu fled to Dubai, tried to start a new crypto exchange from the wreckage, and was arrested in Singapore trying to board a flight. He went from crypto royalty to crypto cautionary tale in 30 days flat.
Net Worth
$0 (post-collapse)
Nationality
Singaporean
Time Horizon
Medium-Term
Risk Appetite
10 / 10
CAREER & BACKGROUND
Born in 1987 in Singapore (of Chinese descent). Attended Columbia University, studying mathematics.
Started his career at Deutsche Bank and Credit Suisse as a derivatives trader in Tokyo.
Co-founded Three Arrows Capital (3AC) with Kyle Davies in 2012. The fund started by trading cryptocurrency and grew rapidly during the 2017 and 2020-2021 bull markets.
At its peak, 3AC managed approximately $10 billion and was one of the most influential crypto hedge funds in the world.
3AC collapsed in June 2022 after the Terra/Luna crash and broader crypto market decline. The fund had borrowed billions from crypto lenders — including BlockFi, Voyager, and Genesis — and couldn't repay when its positions cratered.
3AC filed for bankruptcy in July 2022.
COMPANIES & ROLES
Three Arrows Capital was the main vehicle. It invested in crypto tokens, DeFi protocols, and blockchain companies.
Major positions included Bitcoin, Ethereum, Luna/UST, Avalanche, Solana, and Grayscale Bitcoin Trust (GBTC) shares.
After 3AC's collapse, Zhu and Davies attempted to launch OPNX — an exchange for trading bankruptcy claims. The venture was widely criticized as tone-deaf, given that 3AC's creditors were still trying to recover losses.
OPNX failed to gain traction.
3AC's collapse triggered a domino effect: Voyager Digital, Celsius Network, and BlockFi all went bankrupt partly due to their exposure to 3AC loans. The total damage across the ecosystem exceeded $10 billion.
INVESTING STYLE & PHILOSOPHY
3AC was a leveraged directional crypto fund. The strategy was simple: go long on crypto assets, borrow as much as possible to amplify positions, and ride the bull market.
During up cycles, this generated extraordinary returns. 3AC reportedly turned a small amount of capital into $10 billion.
The problem: no hedging, no risk management, and excessive leverage. 3AC borrowed from dozens of lenders — often using the same collateral for multiple loans.
When prices dropped, there was no way to meet margin calls across all counterparties simultaneously.
Su Zhu and Kyle Davies also made large concentrated bets — most notably a massive position in GBTC (Grayscale Bitcoin Trust) that they expected to convert to an ETF with a premium. When GBTC traded at a persistent discount instead, the position became a massive drag.
THE PLAYBOOK
Risk Approach
Maximum, with zero risk management. 3AC used extreme leverage across a portfolio of volatile crypto assets.
They had no meaningful hedges, no stop losses, and no plan for a downturn. The fund was structurally designed to blow up — the only question was when.
The borrowing practices were even riskier than the positions. They pledged the same collateral to multiple lenders and took unsecured loans.
When the margin calls came, there was nothing left.
Money Habits
Before the collapse, Zhu and Davies lived lavishly in Singapore — expensive residences, luxury lifestyle. After the collapse, both fled.
Zhu was arrested in Singapore in September 2023 while trying to leave the country. He was sentenced to four months in prison for contempt of court related to the bankruptcy proceedings.
The contrast between the pre-collapse lifestyle and the post-collapse fugitive status is stark.
BIGGEST WIN
Riding the 2020-2021 crypto bull market. 3AC reportedly grew from a few hundred million to $10 billion by being aggressively long crypto during the biggest bull run in the asset class's history.
The returns during the up cycle were extraordinary. If they had taken profits and de-leveraged at the top, both founders would be billionaires today.
BIGGEST MISTAKE
Everything about June 2022. When the crypto market crashed — triggered partly by the Terra/Luna collapse — 3AC couldn't meet margin calls.
The fund defaulted on $3.5 billion in loans. Creditors received almost nothing.
The founders fled Singapore. Voyager, Celsius, and BlockFi went bankrupt.
Thousands of retail investors lost their savings through those platforms. It was the largest and most destructive hedge fund collapse in crypto history.
FINANCIAL PHILOSOPHY
Before the collapse, Zhu and Davies espoused what they called the "supercycle thesis" — the belief that crypto was entering a permanent uptrend driven by institutional adoption and that traditional valuation frameworks didn't apply. They argued for maximum leverage because the asset class could only go up.
This thesis was spectacularly wrong. The supercycle was actually a credit bubble — easy lending, leverage, and interconnected counterparty risk that amplified the crash.
Post-collapse, Zhu has been largely silent. No public reckoning, no apology, no acknowledgment of the damage done to creditors and retail investors.
FAMILY & PERSONAL LIFE
Very private. Had a family in Singapore.
The personal details of his life post-collapse have been mostly hidden as he dealt with bankruptcy proceedings, arrest, and legal issues.
EDUCATION
Born in Singapore. Attended Phillips Academy Andover (elite boarding school) and Columbia University, studying mathematics.
Started in traditional finance at Deutsche Bank and Credit Suisse in Tokyo before pivoting to crypto. The pedigree was elite — the risk management was amateur.
BOOKS & RESOURCES
And extensive reporting by the Financial Times and CoinDesk cover the story. The Singapore court documents from the bankruptcy proceedings provide the most detailed account of the fund's reckless borrowing practices
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QUOTES (6)
We are in a crypto supercycle. Traditional valuation frameworks do not apply to this asset class.
The institutions are coming. This isn't 2017. This is a permanent structural shift into crypto.
Leverage in crypto is just a tool. Used correctly, it amplifies returns. Used incorrectly, it amplifies destruction.
I still believe in the long-term thesis for crypto. The execution was the problem, not the vision.
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