Su Zhu’s cryptic statement as rumors swirl of 3AC liquidations and insolvency

Published at: June 15, 2022

Su Zhu, co-founder of Singapore-based crypto venture capital firm Three Arrows Capital (3AC), has put out a cryptic statement on Twitter in response to swirling rumors that the company is battling against insolvency.

Online chatter about 3AC being unable to meet a margin call began after 3AC started moving assets around this week to top up funds on decentralized finance (DeFi) platforms such as Aave to avoid potential liquidations amid the tanking price of Ether (ETH) this week. There are unconfirmed reports that 3AC faced liquidations totaling hundreds of millions from multiple positions.

DeFi-banking platform Celsius has also been frantically shoring up positions to avoid liquidations. Celsius funds account for a significant proportion of the total value locked in various platforms in the DeFi ecosystem, while 3AC is a major borrower. The collapse of either or both would have significant implications for the entire space.

This wallet (tagged as 3AC on Nansen) has been aggressively paying back AAVE debt against its 223k ETH / $264mm position to avoid liquidation. With $198mm in borrowings against it, @ a 85% liq threshold, a -11% move in ETH to $1,042 liqudates ithttps://t.co/y7yJJ0NlMc pic.twitter.com/2S55Rzl9Xc

— Onchain Wizard (@OnChainWizard) June 15, 2022

In a short and sweet Twitter post from earlier on June 15, Zhu broke his silence after around three days of inaction on social media and suggested that the company is working through its issues:

“We are in the process of communicating with relevant parties and fully committed to working this out.”

Messari Crypto’s Ryan Selkis highlighted speculation that 3AC started to reposition its balance sheet after being on the “wrong side of two synthetic trades — with size — in GBTC and stETH.”

Wu Blockchain also reported that the firm lost around $31.37 million through trading on Bitfinex during May.

According to Bitfinex Leaderboard, Three Arrows lost $31,370,031.97 in Bitfinex trading in May, ranking second. The account lost $37,278,593.9 on Bitfinex this year. In June, the account was not recorded. But losses on a single exchange may just be hedge. https://t.co/Xr8cYjLHII

— Wu Blockchain (@WuBlockchain) June 15, 2022

The rumors ramped up after Zhu removed all mention of investments in ETH, Avalanche (AVAX), Terra (LUNA), Solana (SOL), Near Protocol (NEAR), Mina (MINA), DeFi and nonfungible tokens (NFTs) from his Twitter bio, keeping only a mention of Bitcoin (BTC). Others have raised questions about Su deleting his Instagram and asked why both he and co-founder Kyle Davies were inactive on Twitter for three days.

3AC in trouble? rumors swirling- Kyle and Zhu havent tweeted or liked anything in days- Zhu took every coin and # tag out of his bio- Zhu deleted his instagram- an hour ago they dumped 30k stETH and reduced all AAVE positions

— moon (@MoonOverlord) June 14, 2022

A related issue is 3AC’s previous exposure to the Terra eco-system via the Luna Classic (LUNC), which experienced a multi-billion market crash in late May. The platform exchanged roughly $500 million worth of Bitcoin  with the Luna Foundation Guard for the equivalent fiat amount in LUNA just weeks before Terra imploded.

Related: Binance.US faces class-action lawsuit over LUNA and UST sale

Other prominent figures in the space such as the former head of crypto Cathie Wood’s Ark Invest, Chris Burniske, also pointed to rumors of 3AC being the next firm to crumble after Terra and Celsius. Alameda Research was also loosely referenced via a meme.

Well 1 of these 3 is down, and 1 I doubt will fall, but the other is something to watch https://t.co/OgBqd7GqHa

— Chris Burniske (@cburniske) June 14, 2022
Tags
Blockchain
Business
Defi
Venture Capital
Lending
Related Posts
Nexo hires Citibank to advise on acquisitions during market turmoil
Crypto lending platform Nexo says that its strong balance sheet means it can ride to the rescue to provide liquidity during the current market turmoil by acquiring the assets of struggling crypto firms. In a blog post, Nexo announced that it is currently receiving advice from banking giant Citigroup on how best to acquire the assets of insolvent crypto firms so that investors can regain access to blocked funds. Last week Antoni Trenchev, co-founder and managing partner at Nexo, told Bloomberg that the current crypto crash reminds him of the Panic of 1907 — where major Wall Street institutions were …
Blockchain / June 23, 2022
Stanford researcher-led Pledge raises $3M for decentralized lending protocol
Decentralized lending protocol Pledge has secured $3 million in investments for its cross-chain ecosystem focused on long-term financing, highlighting continued innovation in the DeFi sector. The investment round was led by DHVC, a Palo Alto-based venture capital firm, with additional participation from U.C. Berkeley Professor Gary LaBlanc and Stanford University community members Ray Wong and Torsten Wendl. The raise will support Pledge's mission to become a premier crypto-asset lending platform that eventually paves the way for tokenized real-world financial assets. Pledge was created by a group of blockchain-focused researchers at Stanford University, including Professor David Tse, Nicole Chang, Ray Wong …
Business / Sept. 11, 2021
Blockchain sector drives female participation through funding and education
While it’s encouraging to see that the number of female crypto investors is on the rise, women participation within the blockchain technology sector remains low. This was recently confirmed in a report from the World Economic Forum, which found that the COVID-19 pandemic has pushed back gender parity by an entire generation. Vesselina Ratcheva, new economy and society lead for the World Economic Forum, further told Cointelegraph that women indeed remain a minority in the blockchain industry. Funding of women-led blockchain projects Fortunately, a number of new funding initiatives are being offered to drive female participation within the blockchain sector. …
Adoption / May 13, 2021
True Global Ventures doubles down on Web3 with $146M ‘follow-on’ fund
Venture capital firm True Global Ventures 4 Plus (TGV4 Plus) has announced the closure of a $146 million funding round earmarked for a wide range of Web3 projects — highlighting investors’ continued interest in crypto despite an ongoing bear market. The latest closure, dubbed the TGV4 Plus Follow On Fund, was led by a group of 15 general partners who committed over $4 million on average (over 40%, or $62 million) into the fund. The majority of the funding will be primarily injected into Web3 companies within TGV’s portfolio, while the remaining will be used to invest in late-stage Web3 …
Adoption / June 16, 2022
Angel investors vs. venture capitalists
Angel investors and venture capitalists are two types of private investors who provide funding for early-stage and growth-stage companies. However, there are some key differences between them that we will cover in this article. Who are angel investors? High-net-worth individuals who invest in companies at an early stage in exchange for equity in the business are known as angel investors. They frequently invest their own funds and take a more active approach to investment, offering advice and mentoring to the businesses they support. The well-known angel investors in the crypto world include: Roger Ver — He is known as “Bitcoin …
Adoption / Feb. 15, 2023