Three Arrows Capital (also known as 3AC) is suing co-founder Zhu Su's wife for about $40 million from a Dubai villa that liquidators allege was bought with company crypto and transferred to her while Zhu was serving jail time.
The collapsed hedge fund filed the Singapore lawsuit against Evelyn Tao Yaqiong on April 23, according to The Business Times, which reviewed the statement of claim.
Liquidators allege Zhu bought the property for 110 million dirhams, or about $30 million, using part of a purported $50 million crypto loan from 3AC.
- And the timing could become central to the case since Zhu allegedly bought the villa about three weeks before a British Virgin Islands court placed Three Arrows Capital into liquidation in June 2022.
The property was transferred during Zhu's jail term
Zhu later transferred ownership to Tao around Oct. 26, 2023, while serving a four-month sentence in Singapore for failing to comply with court orders requiring him to provide information and documents to the liquidators, the report said.
- Zhu had been arrested at Changi Airport on Sept. 29, 2023, while trying to leave Singapore.
- Kyle Davies, Zhu's fellow Three Arrows Capital co-founder, received the same four-month committal order, although a Singapore Court of Appeal judgment published in June 2025 said he remained outside the country.
- The liquidators later sued both founders in the British Virgin Islands for about $66 million.
- Yet, despite the liquidation proceedings, Zhu and Davies launched OPNX, an exchange for trading crypto and bankruptcy claims, in April 2023, though the platform shut down in February 2024, less than a year after its launch.
Tao allegedly paid nothing for the villa and sold it in January 2024 for 146 million dirhams, or roughly $40 million.
The liquidators said the circumstances suggested Zhu transferred the property to keep it and any proceeds beyond the reach of Three Arrows Capital's creditors, according to the report.
Zhu's wife disputes the claim
Tao has denied knowing that the purchase money allegedly came from Three Arrows Capital or that Zhu had breached his duties.
She said she believed the villa was a genuine gift for herself and their daughters, while her lawyers have applied to strike out the lawsuit, per the report.
The claim remains unproven, and the liquidators said they don't know where the sale proceeds are now held.
- Three Arrows Capital entered liquidation in June 2022 with creditor claims exceeding $3 billion. Its liquidators announced a seventh interim distribution for creditors earlier this year.
- Founded in 2012, 3AC grew into one of the industry's largest and most interconnected investors through aggressive and often leveraged bets across tokens and crypto companies.
- But Terra's collapse in May 2022 and the broader crypto selloff triggered heavy losses and margin calls that 3AC couldn't meet.