Once known as brilliant talents in the financial field, especially the cryptocurrency market, Su Zhu and Kyle Davies attracted widespread attention from the investment community. Despite facing mistakes and difficulties that led them to face the consequence of 4 months in prison, both are now back and free. So, who are Su Zhu and Kyle Davies? Let’s explore more about their turbulent journey in the article below!
Who Are Su Zhu & Kyle Davies?
Su Zhu, also known as Su Zhuo, is a Chinese-born man who has achieved incredible feats in the financial field. Born in August 1987, he went on a journey from his hometown to settle in the United States at the age of 6. After graduating from Phillips Academy in 2006, Su Zhu continued his academic journey at Columbia University in New York, where he showed his talent and professionalism.
Su Zhu’s career began when he joined Flow Traders in 2009, where he worked hard as a trader for over 2 years before moving to Deutsche Bank in Germany. With his important role as a trader, Su Zhu gained valuable experience. In 2012, he co-founded Three Arrows Capital, a venture capital fund, with Kyle Davies. Over the next 10 years, Su Zhu served as CEO/CIO of Three Arrows Capital, creating impressive investment opportunities and making a name for himself.
Not only that, Su Zhu is also one of the co-founders of Sensus Markets, proving that his talent and creativity are constantly innovating and paving the way for new discoveries in the financial field.
Kyle Davies, Su Zhu’s teammate and close friend, also has a resume that is no less impressive than his friend’s. The two men were not only classmates from high school, but they also continued to be classmates at Columbia University, where Kyle Davies began to build a name for himself.
Starting his career at Credit Suisse in September 2009, Kyle quickly realized the great potential of investing in global markets. With his sharp vision, he decided to leave the company to co-found Three Arrows Capital with Su Zhu in 2012 when he realized that the price difference between regions around the world had become a business opportunity.
Su Zhu and Kyle Davies, each with their own path, have together built impressive achievements and brought their names to new heights in the risky and opportunity-filled financial market.”
Steps Towards Success
Inspiration At Columbia University
Mathematics classes not only helped Su Zhu and Kyle Davies develop sharp analytical skills but also laid the foundation for breakthroughs in the financial field.
Apprenticeship At Credit Suisse & The Magic At Flow Traders
Su Zhu didn’t waste any time proving his talent. Graduating early and moving to Tokyo, he joined the derivatives trading desk at Credit Suisse – a key step on his path to becoming an investor. During this time, Su Zhu reunited with Kyle Davies, an old friend who was also an intern there.
Although he was later laid off due to the financial crisis, this meeting not only led to a key partnership in his career but also opened a new chapter at Flow Traders in Singapore. This is where Su Zhu began to develop his arbitrage trading skills, focusing on exchange-traded funds and trading related funds to generate small profits that would add up to significant profits for Flow Traders.
Burgeoning Talent
Su Zhu is not only a talented trader, but also a symbol of bluntness and determination. Renowned for his sharp vision, he does not hesitate to show his unique confidence in the hot office of Flow Traders – where he even took off his shirt and sat trading.
At Flow Traders, Su Zhu’s breakthrough was not only a source of motivation but also a challenge to himself. Success here not only brought him fame but also motivated him to step into a new challenge at Deutsche Bank, following in the footsteps of cryptocurrency legend Arthur Hayes. Kyle Davies, Su Zhu’s teammate, continued his journey at Credit Suisse, but both felt tired from the working environment in large banks.
Establishment Of Three Arrows Capital Fund
In 2012, at the age of 24, Su Zhu and Kyle Davies embarked on an entrepreneurial journey founding the investment fund Three Arrows Capital, marking a new chapter in both of their careers. Courageously borrowing nearly $1 million from family and focusing on forex market price arbitrage strategies, they chose Singapore as the company’s base to execute their plans.
Despite facing challenges from banks, Su Zhu and Kyle Davies did not hesitate, but rather, they took advantage of small opportunities to make profits. The “kimchi premium” strategy on global cryptocurrency exchanges quickly brought positive results for Three Arrows Capital.
The company’s next step was to leverage for big profits by borrowing, a bold move that could potentially yield significant returns. If successful, the profits could exceed the amount owed on the loan, creating a continuous growth cycle.
Not only stopping at financial strategy, Three Arrows Capital also focused on building image and influence through social media, especially X (Twitter). Active participation on X helped the fund attract a large number of followers.
Su Zhu, in particular, is famous for his “supercycle” theory of cryptocurrency, which expects the market to experience a prolonged bull market. These predictions, although not always accurate, helped him attract thousands of followers and become an icon in the cryptocurrency community.
In the years 2020 and 2021, Three Arrows Capital was not only a financial institution but also a symbol of innovation and success in the cryptocurrency market. With the bold combination of a unique financial strategy and strong influence on social media, Su Zhu and Kyle Davies broke through boundaries, conquered the crypto market, and brought Three Arrows Capital to the pinnacle of success.
Being Greedy, One Falls Into The Trap
As of March 2022, Three Arrows Capital (3AC) proudly announced that it managed around $10 billion in assets, topping the list of the world’s leading cryptocurrency investment funds. Under the leadership of Su Zhu and Kyle Davies, 3AC has built a reputation in the crypto market, not only through its investment fund but also through its operation of the popular cryptocurrency podcast – Uncommon Core.
However, the collapse of Three Arrows Capital began in May 2022, when it was suspected to be linked to the collapse of LUNA-UST. 3AC is believed to have invested over $600 million in the project, but when UST lost its value and collapsed, the investment was left with only a few hundred dollars.
To recoup its losses, 3AC decided to borrow more money with high leverage and invest in Ethereum. To increase profits, 3AC decided to send the ETH to Lido Finance to earn interest and receive stETH. Then, it pledged the stETH to Aave to borrow ETH and continue to send ETH to Lido to get stETH, creating an endless loop to optimize profits. However, their plan met with strong opposition from the market, causing the depeg of stETH to become increasingly serious. 3AC was forced to sell off a large amount of stETH to protect its assets and prevent collapse.
The downfall of 3AC not only affected themselves but also had a ripple effect across numerous organizations in the same industry. Lending platform Celsius, investment fund Genesis Trading, Blockchain.com, lending platform BlockFi, and cryptocurrency loan company Voyager Digital, all bore significant impacts from this sudden collapse, causing a profound shock in the crypto community.
On July 2, 2022, Three Arrows Capital (3AC) has accepted the inevitable and officially filed for bankruptcy under Chapter 15 in the U.S. Bankruptcy Court for the Southern District of New York. Prior to that, 3AC’s instability came to light when a Bloomberg team visited its Singapore office in late June. There, they found a grim scene: doors closed, computers turned off, and multiple letters strewn outside the door, all signs of decay.
The decision to file for bankruptcy in New York sends a strong message from 3AC that it intends to comply with the U.S. bankruptcy process. The company announced that this is to ensure that the asset liquidation process will be orderly and fair, avoiding unnecessary litigation from creditors. In the absence of protection, there is a risk that many creditors will take the company to court, creating a chaotic bankruptcy scenario.
Notably, there are rumors that Three Arrows Capital CEO Su Zhu is beginning to liquidate his personal assets in Singapore, including a $35 million mansion, a $50 million yacht, and multiple supercars. This action is not only a sign of the company’s plight, but it also raises questions about what the founders will do after this disaster.
Establishing OPNX Exchange To Repay Debts
On February 9, 2023, Su Zhu, the founder of Three Arrows Capital (now renamed 3AC Ventures), announced on Twitter the official launch of Open Exchange (OPNX), a trading platform that specializes in trading claims to assets in crypto companies that went bankrupt in 2022, such as: FTX, Genesis, Celsius, Voyager, BlockFi, and Three Arrows Capital.
Information about OPNX was first revealed in January 2023 when a fundraising pitch deck appeared on Twitter. OPNX, backed by the 3AC Ventures team and CoinFLEX founder Mark Lamb, is expected to be a new generation cryptocurrency platform, supporting a variety of products such as spot, futures, claims to assets, custody, and even stock/forex trading.
The platform promises to use Proof of Reserves technology based on Zero Knowledge Proof to ensure full transparency and auditing of user funds from blockchain data. CoinFLEX’s FLEX token will be the main currency used on OPNX.
Kyle Davies, one of the co-founders of Three Arrows Capital, announced a decision to donate a portion of the OPNX project’s income to compensate creditors for the losses incurred during the 3AC fund’s collapse in 2022. Davies described this act as a ‘good deed’ and likened it to ‘striking a fleeing man no one else would strike.’
Davies clarified that this action was unrelated to the formal liquidation process and only proceeded with ‘support and approval.’ Creditors have been reimbursed, and he mentioned that participation wasn’t mandatory for those unwilling.
When asked about creating OPNX while 3AC is still undergoing liquidation, Kyle Davies explained it was for creditors to ‘benefit’ from OPNX.
Despite skepticism within parts of the crypto community about OPNX’s success, co-founder Su Zhu remains determined and confident, emphasizing the learning from failure and a commitment to rebuilding from scratch.
Su Zhu Arrested
However, shortly after, Su Zhu was reportedly detained by Singaporean authorities while attempting to leave the country, as per Bloomberg sources. The incident occurred on the afternoon of September 29, 2023, and was provided by Teneo, the bankruptcy trustee for Three Arrows Capital.
Teneo asserted that Su Zhu failed to comply with a court order, demanding cooperation in the bankruptcy proceedings of Three Arrows Capital. The co-founder faces a four-month jail term, as ruled by the court.
Earlier, the co-founders of Three Arrows Capital, Su Zhu and Kyle Davies, were barred from trading and engaging in financial activities in the Lion City for a period of 9 years.
After over 3 months of detention in Singapore and several questioning sessions related to the collapse of Three Arrows Capital, Su Zhu is expected to be released after the court hearing on December 13, 2023. The 3AC Ventures founder actively cooperated during detention, signaling a potential early release from jail.
Currently, Su Zhu has also made a comeback on Twitter on December 1, 2023, following a period of silence.
Summary
The above are the information about Su Zhu and Kyle Davies, as well as the events that have happened around the Three Arrows Capital investment fund that once “made a splash” in the crypto market. Through the article, CoinNerd hopes to have brought readers a comprehensive perspective on Su Zhu and his companion.
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* We hope this information will help you in your investment process, but this is not investment advice. Every investment carries risk, especially in this industry, so DYOR before making a decision.
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