Disgraced 3AC Duo Tell Bloomberg They Regret the Losses, Now Off to Dubai
They’ve been on the run like fugitives for five weeks but now the disgraced duo behind Three Arrows Capital have come out of the woodwork…
They’ve been on the run like fugitives for five weeks but now the disgraced duo behind Three Arrows Capital have come out of the woodwork to talk to Bloomberg, albeit spending most of the interview dodging questions about their catastrophic mismanagement of the crypto hedge fund.
Su Zhu and Kyle Davies denied charges they pulled money out of 3AC before the luxury ship went down, and downplayed extravagant purchases including a $50 million yacht and a luxury bungalow valued between $35-$48 million in Singapore.
“Three Arrows Capital was hit hard by the collapse of luna and its associated terraUSD stablecoin. When terraUSD unpegged, it led to $14 billion being wiped from the market. Three Arrows Capital had invested $200 million in terra and couldn’t pay back creditors as a result of those losses. Voyager Digital is one of the companies that 3AC owed money to — Voyager loaned 3AC $650 million in crypto back in March — and has itself filed for bankruptcy since 3AC’s collapse.
Three Arrows Capital managed a fund estimated to be worth $10 billion back in March, reported Fortune.”
Zhu and Davies admitted their crypto speculation led to cascading margin calls on bad loans, but said they were the real victims.
“’People may call us stupid. They may call us stupid or delusional. And, I’ll accept that. Maybe,’” Zhu said. ‘But they’re gonna, you know, say that I absconded funds during the last period, where I actually put more of my personal money back in. That’s not true.’”
That’s a bold statement considering the creditor list filed in the British Virgin Islands bankruptcy court includes Davies’ wife, Chen Kaili Kelly, who filed a claim for $66 million. Zhu himself entered a $5 million claim.
The court ordered 3AC to liquidate its assets after it was sued for not repaying debts. Overall, 3AC owes $3.5 billion to 27 different crypto creditors.
No matter how you view it, it all looks sketchy. Whatever comes of the 3AC case, we think it’s good when challenging crypto market conditions out the bad actors and grifters so that they crash and burn. What remains is better for it.