The founders of the now-defunct crypto hedge fund Three Arrows Capital (3AC) are speaking out after months of silence in the wake of the firm’s bankruptcy.
3AC founders Kyle Davies and Zhu Su have both taken to Twitter to speak on the recent collapse of crypto exchange FTX and its trading arm Alameda Research, saying that the firms were also involved with triggering 3AC’s bankruptcy.
Says Davies,
“I ran a hedge fund Three Arrows (aka 3AC) with Su for over a decade, 7 to 10 figures organic. Since 2018 we were all in on crypto.
In May 2022, Luna exploded and the aftermath of correlated positions/spreads/investments all moving against got us.
We understand now that FTX/Alameda hunted our positions but at the end of the day we lost our money (we were the largest $ losers) and that of LP’s (liquidity providers)/creditors. Today we are not in control of the firm, there is a liquidation process which will run due course for all involved.”
Responding to what purport to be screenshots of a Telegram chat with Alameda, Zhu Su says that Three Arrows Capital was wronged in some way, but didn’t go into details.
“It’s a long story but we were scammed just like you guys, it’s ok – justice is coming”
Despite any claims against FTX or Alameda, both Davies and Zhu have both said that they perhaps could have spent more time studying the mechanics of LUNA and UST before investing in it.
“Luna/UST was unprecedented and we completely messed up the thesis around it. We were attracted by the quality of backers/builders/team and didn’t spend enough time on the mechanics.”
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