Su Zhu disclosed that the 3AC team’s strong relationship with Terra co-founder Do Kwon caused them to ignore multiple red flags, which ultimately resulted in a multi-million dollar loss for the hedge fund.
The founders of the scandal-plagued cryptocurrency hedge fund Three Arrows Capital (3AC), which declared bankruptcy in the first week of July, have at last been located after being missing for five weeks.
The two founders of the cryptocurrency hedge fund, Su Zhu and Kyle Davies, acknowledged in an interview with Bloomberg that a string of poor choices that should have been avoided were made due to overconfidence brought on by a multiyear bull market in which lenders saw their value rise as a result of financing companies like 3AC.
In addition, Zhu acknowledged their friendship with Terra founder Do Kwon and expressed their optimism for the company’s future success. He acknowledged that the company’s proximity to Terra caused them to ignore some warning signs regarding the company, which ultimately resulted in their $500 million investment losing all of its value. Zhu clarified:
“If we could have seen that, you know, that this was now like, potentially like attackable in some ways, and that it had grown too, you know, too big, too fast.”
The LUNA (now known as Luna Classic) investment, according to the company’s two founders, was unquestionably a setback for the business. However, the true problem started when Bitcoin (BTC) plummeted below $20,000 and the company was unable to obtain more finance. Zhu asserted that operations continued unabated even after LUNA’s demise, stating:
“Throughout that period, we continued to do business as usual. But then yeah, after that day, when, you know, Bitcoin went from $30,000 to $20,000, you know, that, that was extremely painful for us. And that was in, that ended up being kind of the nail in the coffin.”
The founders claimed that they fled into hiding as a result of several death threats when their whereabouts and the reason for their exile were enquired about. The pair said they were relocating to Dubai but wouldn’t say where they were at the moment.
The founders cleared the air regarding the $50 million yacht that was mentioned in the recently filed court case and refuted any claims that they withdrew money before 3AC declared bankruptcy. Zhu stated that the yacht “has a full money trail” and that it “was bought over a year ago and commissioned to be built and to be used in Europe.”