The founders of a troubled crypto hedge fund have reportedly reappeared after leaving their creditors high and dry with a multi-billion dollar bill for over a month.
According to a new report by Bloomberg, Three Arrows Capital (3AC) co-founders Kyle Davies and Su Zhu have resurfaced after five weeks of hiding as their creditors seek a $2.8 billion repayment.
Zhu tells Bloomberg the pair took a leave of absence because they received numerous death threats, but says that being away didn’t stop them from communicating with authorities.
Davies says also notes he and Zhu truly believed in their trading and investment strategies.
“We believed in everything to the fullest. We had all our, almost all of our assets in there. And then in the good times we did the best. And then in the bad times, we lost the most.”
Zhu and Davies also highlight that the collapse of Three Arrows Capital along with embattled firms Celsius and Voyager Digital was not a surprise in hindsight as they all ended up making the same bets.
“It’s not a surprise that Celsius, ourselves, these kind of firms, all have problems at the same time. We have our own capital, we have our own balance sheet, but then we also take in deposits from these lenders and then we generate yield on them.
So if we’re in the business of taking in deposits and then generating yield, then that, you know, means we end up doing similar trades.”
Zhu also says that the implosion of the Terra (LUNA) ecosystem greatly impacted their business model as it was all downhill after LUNA lost over 99% of its value in the span of just a few days.
“What we failed to realize was that LUNA was capable of falling to effective zero in a matter of days and that this would catalyze a credit squeeze across the industry that would put significant pressure on all of our illiquid positions…
We had different types of trades that we all thought were good, and other people also had these trades. And then they kind of all got super marked down, super fast.
Because LUNA just happened, it was very much a contagion where people were like, ‘OK, are there people who are also leveraged long staked Ether versus Ether who will get liquidated as the market goes down?’ So the whole industry kind of effectively hunted these positions.”
Two weeks ago, a New York-based judge issued a ruling that the 3AC’s remaining assets will be frozen as part of company’s ongoing bankruptcy proceeding.Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inbox
Check Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Liu zishan