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Three Arrows Capital
Su Zhu and Kyle Davies grew Three Arrows into one of crypto's largest funds before its 2022 collapse and liquidation.
Three Arrows Capital
Founded in 2012 by former Credit Suisse traders Su Zhu and Kyle Davies, Three Arrows Capital began as a currency arbitrage firm before pivoting into crypto around 2017. The fund operated from Singapore with additional offices in the US, growing rapidly as the crypto market expanded. Its founders became influential voices on Crypto Twitter, amassing large followings and publicly touting a 'supercycle' thesis that called for sustained crypto price appreciation without major downturns. Three Arrows deployed capital across digital assets, DeFi protocols, blockchain infrastructure, and crypto gaming. The fund held concentrated positions in the Grayscale Bitcoin Trust, staked Ethereum through Lido, and participated in equity rounds for crypto-native companies. Notable investments included a $200 million stake in Luna Foundation Guard during the Terra ecosystem's buildout, and exposure to the Axie Infinity play-to-earn gaming ecosystem. Its borrowing was significant — the firm took uncollateralized loans from crypto lenders like Voyager Digital and Celsius, while depositing funds into Anchor Protocol, the Terra-based lending platform offering yields near 20%. At its peak in early 2022, Three Arrows managed an estimated $10 billion to $18 billion (Altss estimate). The fund maintained no formal regulatory filings in Singapore, operated as an exempted fund manager until revocation, and had no disclosed auditor in its final year. Its structure blurred lines between hedge fund, venture investor, and proprietary trading desk. The Terra-Luna collapse in May 2022 triggered a cascade of defaults — the Luna Foundation Guard position was wiped out, Anchor Protocol deposits became inaccessible, and margin calls across multiple lenders overwhelmed the firm's collateral. In late June 2022, Three Arrows defaulted on a $665 million loan to Voyager Digital and was ordered into liquidation in the British Virgin Islands by a BVI court on June 27, 2022 (per Teneo, the court-appointed liquidator). Three Arrows was structurally different from traditional macro or multi-strategy funds — it operated with extreme concentration, deep illiquidity, and significant offshore leverage with minimal transparency. The liquidation proceeding continues under Teneo, which is pursuing assets globally, including claims against the co-founders. In September 2023, Singapore's central bank issued nine-year prohibition orders against Zhu and Davies for regulatory breaches (per Monetary Authority of Singapore, September 2023). The case has become a reference point for crypto fund blowups and counterparty risk cascades in unregulated digital asset lending markets.
General information
Firm type
Asset Manager
Year founded
2012
AUM
At peak, estimated $10B to $18B (Altss estimate)
Location
Region
Asia
Country
Singapore
City
Singapore
Corporate office
Singapore
Additional offices
New York · Palo Alto · San Francisco · Oakland
Principals
Kyle Davies
Co-Founder
Su Zhu
Co-Founder
Sector focus
Frequently asked questions
Who ran investment decisions at Three Arrows Capital?
Co-founders Su Zhu and Kyle Davies jointly controlled all investment decisions. Both were former Credit Suisse traders. They operated with no formal investment committee disclosed to creditors or investors. The liquidator Teneo later stated in BVI court filings that all material decisions flowed through Zhu and Davies personally.
What caused Three Arrows Capital to collapse?
The proximate cause was the implosion of the Terra-Luna ecosystem in May 2022, where Three Arrows had placed a $200 million investment in Luna Foundation Guard and deposited significant assets in Anchor Protocol. These losses triggered margin calls on leveraged positions across multiple lenders. The fund defaulted on a $665 million loan to Voyager Digital in June 2022. A BVI court ordered liquidation on June 27, 2022, appointing Teneo as liquidator (per Teneo, June 2022).
What was Three Arrows Capital's actual AUM before liquidation?
No independently audited AUM figure exists. Public estimates range from $10 billion to $18 billion at the peak in early 2022, based on reported positions, borrowing volumes, and subsequent creditor claims (Altss estimate). The liquidator's initial filings did not confirm a specific number, reflecting the complexity of tracing assets across multiple jurisdictions and DeFi protocols.
How is Three Arrows Capital structured from a regulatory standpoint?
Three Arrows was a British Virgin Islands-incorporated fund with operations in Singapore. It operated as an exempted fund manager in Singapore until that status was revoked. The entity had no US SEC registration. Its regulatory status was a key issue in the Monetary Authority of Singapore's September 2023 prohibition order, which cited exceeding AUM thresholds without required filings (per Monetary Authority of Singapore, September 2023).
What were Three Arrows Capital's largest known positions?
Confirmed large positions included the Grayscale Bitcoin Trust, staked Ethereum through Lido Finance, the Luna Foundation Guard stake, and holdings in Axie Infinity-related tokens. The fund also had significant deposits in Anchor Protocol and borrowing relationships with Voyager, Celsius, and BlockFi. These positions were concentrated and highly correlated.
Where are the co-founders now?
Su Zhu was arrested in Singapore in September 2023 under the prohibition order and sentenced to four months in prison (per Bloomberg, September 2023). Kyle Davies' location has been reported as varying; he has not publicly confirmed his whereabouts. Zhu was released from custody in late 2023. Both remain subject to the BVI liquidation proceeding and MAS prohibition orders.
Are there ongoing legal proceedings related to Three Arrows?
Yes. The BVI liquidation by Teneo continues, pursuing asset recovery globally. In June 2023, Teneo also filed claims in US bankruptcy court during the Genesis Global Capital proceeding, asserting a $1.3 billion claim against the Genesis entities (per Teneo filings, June 2023). Singapore's prohibition orders remain in effect through 2032.
Profile maintained by Altss using OSINT (open-source intelligence), regulatory filings, licensed data partners, and verified direct submissions. Read the methodology. Last updated: . Continuous refresh with full update cycles at least every 30 days.
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