3AC Founders Come Out of Hiding, Break Silence

Three Arrows Capital (3AC) has been in the news for its recent bankruptcy. The crypto hedge fund based in Singapore failed to meet its loan obligations to various crypto outfits. It led to a liquidation problem and then it spiraled down in the market.

The firm’s founders recently broke their silence after several weeks. They blame 3AC’s troubles on Terra’s collapse and the market downturn.

Kyle Davies and Su Zhu Claimed Death Threats

A court in the British Virgin Islands ordered the liquidation of 3AC’s assets in June. This was after the firm was not able to meet its debt obligations. In that light, creditors sent lawyers to represent them throughout the legal process.

But it was reported that the founders refused to cooperate with lawyers. They had gone underground without a trace till now.

Bloomberg reported that Kyle Davies and Su Zhu recently claimed to have received death threats. And it was the reason for their hiding. They said their silence in public didn’t translate to not communicating with relevant authorities.

Zhu was quoted to have told lawyers from LLP Solitaire via a phone interview. He said that they spoke with authorities. 

Davies acknowledged that their firm’s collapse caused losses for many entities. He, however, noted that he and Zhu did not profit from the situation. He said further that both of them put in their savings, hoping to revive the company. 

After the liquidation court order, creditors filed a report that revealed a debt of $2.3 billion. Nevertheless, the debt value is speculated to increase as time goes on.

Bet on LUNA Was the Major Collapse Catalyst

Zhu said what they were oblivious of was that LUNA could fall to zero. He said their strong bet on the project was part of the reasons for 3AC’s collapse.

Zhu said further that they suffered a lot of losses as a result of trading LUNA. Terra’s collapse created a credit squeeze throughout the crypto space. It consequently put pressure on their liquidity.

Furthermore, he mentioned that the final blow was the sharp drop in Bitcoin price. The asset dropped from $30,000 to $20,000. Zhu revealed that creditors still let them operate after Terra collapsed.

The gesture showed they were confident in the firm’s financial position. But the crypto market pressed them further than Terra.

Reports show that 3AC owes 20 creditors about $3.57 billion combined. The largest creditor is Genesis Asia Pacific based in Singapore. 3AC’s fall caused a lot of sales by institutional investors in the crypto space.

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