The meltdown in the crypto markets continues to take victims, as this week has brought more news of firms staring down the barrel of insolvencies. The cascading distress highlights just how insular and tangled a web the whole cryptocurrency space currently is.
To illustrate this, a simple look at Three Arrows Capital (3AC) is all that is required.
Three Arrows Capital
Three Arrows Capital is a hedge fund that was established in 2012, and could alternatively be described as a crypto venture capital fund. Founded by the high-profile Su Zhu, it swiftly became one of the biggest firms in crypto.
One of its investments was in Luna, the algorithmic stablecoin ecosystem which imploded last month, sending a $40 billion + project into the ether (pun sort of intended). It’s hard to exactly quantify how much 3AC were exposed to, but jumping on-chain more-or-less confirms at least $200 million of exposure from known wallets, while the figure is suspected to be high as $450 million according to some analysts.
A verified source has confirmed that Zhu Su, the CEO of 3AC, owned a megayacht worth $50m that he would show off to friends and prospective investors to signal his luxurious wealth. This yacht was purchased with borrowed money, and 3AC has been unable to cover it beyond the down.— FatMan (@FatManTerra) June 22, 2022
With rumours swirling and the markets continuing to tank, selling pressure mounted and respite was nowhere to be seen. After disappearing from social media for three days, CIO Zu Shu finally broke his silence.
We are in the process of communicating with relevant parties and fully committed to working this out— Zhu Su 🔺 (@zhusu) June