The tweet elicited a variety of responses from the community, many of whom accused the co-founder of 3AC of assigning blame while his whereabouts were unknown.
After almost a month of silence, Su Zhu, co-founder of the Singapore-based crypto venture capital firm Three Arrows Capital (3AC), returned to Twitter. He accused liquidators of luring them with regard to StarkWare tokens in another mysterious tweet.
In a tweet with a letter from legal counsel attached, it was stated that Starkware equity had a token warrant that had expired on July 5 and that the liquidator had failed to exercise it, causing the loss of Starkware tokens. Liquidators, according to Zhu, are responsible for not using the Starkware tokens and for luring the company into providing information to the court.
The co-mysterious founder’s post came days after 3AC, which had ignored many margin calls from its lenders, filed for Chapter 15 bankruptcy in a New York court. In June, there were speculations that the company was bankrupt. Later, a British Virgin Islands court ordered the liquidation of 3AC finances.
The bear market turbulence in May, which was sparked by the breakdown of the Terra ecosystem, was the beginning of 3AC’s problems. It was then discovered that the cryptocurrency hedge fund had amassed $559 million in locked LUNA, which dropped to $650 after the meltdown. The company also has sizeable holdings in Solana (SOL) and Avalanche (AVAX), both of which experienced fresh lows at the same time.
The bulk of cryptocurrencies lost approximately 70% of their value since the peak of the market when the cryptocurrency market crashed. Additionally, 3AC has sizable investments in artificial assets including Lido’s Staked ETH and Grayscale Bitcoin Trust (GBTC) (stETH). As a result, the struggling crypto hedge funds had to liquidate their holdings as the prices of the leading cryptocurrencies fell to a 4-year low. According to estimates, 3AC liquidated roughly $400 million worth of assets across various platforms.
As a result of 3AC’s apparent insolvency, Voyager, a lender, filed for bankruptcy last week after the hedge fund missed a $500 million payment. Following the cryptocurrency hedge fund’s default on a $1 billion loan, BlockFi also had business difficulties.
The new post from the 3AC co-founder sparked a furious response from the community and comes amid suspicions that the founders of the cryptocurrency hedge fund have vanished. Many people enquired after him, while others made fun of him for expecting “good faith” from liquidators after losing millions of dollars in investor money. One user commented:
“Zhu really over here talking about “good faith” lmao”
Zhu was criticized by another user for using the victim card and they wrote:
“This is a pretty standard “spin” for the architects of financial destruction once things hit the legal stage. Zhusu is playing the “victim” card in the court of public opinion. Disgusting behavior, but to be expected at this stage.”
