Liquidators of Three Arrows Capital sue Zhu Su’s wife, seeking to recover approximately $40 million in proceeds from the sale of Dubai properties.

According to The Business Times, crypto hedge fund Three Arrows Capital (3AC), which is in liquidation, is suing co-founder Zhu Su’s wife Evelyn Tao Yaqiong to recover proceeds from the sale of a Dubai property worth approximately 146 million dirhams (around $40 million). Liquidators claim the property was purchased in June 2022, about three weeks before 3AC entered liquidation, for roughly 110 million dirhams (about $30 million), with funds suspected to have come from a $50 million cryptocurrency loan Zhu Su received from 3AC. In October 2023, while Zhu Su was serving a sentence in a Singapore prison, he transferred the property’s ownership to his wife, who then sold it in January 2024 for around $40 million. 3AC’s liquidators allege Zhu Su transferred the property to shield assets from creditors and liquidators, and accuse him of breaching fiduciary duty by diverting company funds to buy the asset. Zhu Su’s wife denied the allegations, stating she was unaware of the fund source or Zhu Su’s alleged violations, and claimed the property was a personal gift to her. She also noted the couple had separated as early as 2022, asserting her right to the sale proceeds. Three Arrows Capital collapsed in 2022 amid the crypto market crash, currently owes creditors over $3 billion, and its liquidators had previously sought to recover around $1.3 billion in assets from the two founders.