3AC: $10B hedge fund went on the run with founders
Three Arrow Capital
Modified Date:- Published Date:-Categories: Cryptocurrency
3AC: $10B hedge fund went on the run with founders
Singapore-based crypto hedge fund Three Arrows Capital (3AC), which at one point managed over $10 billion in assets, became one of several crypto firms to go bankrupt in this bear market. However, Three Arrows Capital (3AC)collapse was not a purely market-driven event. As more information emerged, the collapse seemed like a self-inflicted crisis brought on by an uncontrolled decision-making process.
To put it in a nutshell, the hedge fund made a series of large directional trades in Grayscale Bitcoin Trust (GBTC), Luna Classic (LUNC) and Stacked Ether (stETH) and borrowed funds from over 20 large institutions. The May crypto crash sparked a series of spiraling investment collapses for hedge funds. The firm collapsed and loan defaults led to a massive transition to crypto.
A few weeks before Terra exploded, Three Arrows Capital (3AC)exchanged approximately $500 million worth of bitcoin (BTC) with the Luna Foundation Guard for the same fiat amount in LUNC. Zhu called for all mention of investments in ETH, Avalanche (AVAX), LUNC, Solana (SOL), Near Protocol (NEAR), MINA (MINA), decentralized finance (DeFi) and non-fungible tokens (NFTs) to be removed from his account. After that the rumors intensified. Twitter bio, keeping only mention of bitcoin (BTC).
Three Arrows Capital (3AC) series of liquidations had a disastrous effect on crypto lenders such as BlockFi, Voyager and Celsius. Many of the cryptocurrency lenders eventually had to file for bankruptcy on their own due to exposure to 3AC. 3AC Liquidator has requested a stay of proceedings against the business and access to its Singapore offices in a petition to the High Court of Singapore.
Court documents show that Three Arrows Capital (3AC) owed creditors about $3 billion, of which 3AC's largest creditor, Trader Genesis Asia Pacific, a subsidiary of Digital Currency Group, took out $2.36 billion in debt. Among the long list of creditors, Zhu Su also filed a $5 million claim.
In addition to Zhu's claim, Three Arrows Capital (3AC)investment manager 3AC Ltd is reportedly claiming $25 million. Kyle Davies' wife, Kelly Kali Chen, is reportedly seeking to claim a $65.7 million debt in the same filing in the Eastern Caribbean Supreme Court. A court in the British Virgin Islands ordered the liquidation of 3AC on 27 June.
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