Three Arrows Capital (3AC) co-founders Su Zhu and Kyle Davies showed up to share aspects of the story related to the collapse of 3AC. However, he pleaded not guilty to rumors that he had stolen investor money.
in an exclusive interview with bloombergthe duo cited high-leverage betting, the collapse of the Terra ecosystem, and holdings of Grayscale Bitcoin Trust (GBTC) as catalysts for the collapse of hedge funds.
The founders admitted to taking risky leveraged bets on their investments. Crypto winter. Their overconfidence led the fund to respond to a kind of market that didn’t go as planned.
Davis commented:
“We believed in everything to the fullest and had almost all of our assets there. lost.”
he added:
“The whole situation is disappointing. A lot of people lost a lot of money.”
Luna’s fall also collapses 3AC
Giant of Terra collapse It was a dealbreaker for 3AC. Not only did it lose a large position in LUNA, but the resulting credit pressure across the cryptocurrency market sent hedge funds into a further death spiral.
3AC held a large position in staked ethereum (stETH) suffered from leverage hunting. As the price of the cryptocurrency market fell due to the collapse of the Terra ecosystem, many traders took the opportunity to go long his stETH, causing its price to trade below the price of his ETH. .
To keep the deal going, 3AC continued to borrow from large digital asset lenders and investors, the situation spiraled out of control, 3AC exploded, and other companies such as Voyager Digital, Celsius filed for bankruptcy. contagion had an impact.
Reflecting on this incident, Mr. Zhu said:
“What we didn’t realize was that Luna could be virtually zero in just a few days, and this would catalyze an industry-wide credit crunch, putting huge pressure on all illiquid positions. It was to become
How 3AC creditors are holding up
as 3AC collapsed, Hedge funds tumbled from managing assets worth more than $10 billion to owing creditors $3.5 billion Across 32 companies.
injured creditors are submitted Securing assets of hedge funds in Singapore. If this is approved, a portion of the funds can be recovered from the liquidation proceeds.
Zhu and Davies said they are working with relevant authorities to assist creditors in the collection process.
3AC Founders Leave for Dubai
following on from before report As 3AC’s headquarters move from Singapore to Dubai, the beleaguered founders are trying to find safety in Emirates.
With Dubai positioned to become a global cryptocurrency hub, Zhu and Davies believe they can set their lives in motion from their next location, Dubai. The move is to move away from the death threats from investors that have plagued them.
“For Kyle and I, there are so many crazy people in crypto that are causing death threats and this kind of commotion,” Zhu said. I feel that if I can keep a low profile, that’s everyone’s concern.”