Based on Twitter user @DrSoldmanGachs, a self-announced creditor of troubled Singaporean crypto hedge fund Three Arrows Capital (3AC), the now-defunct entity allegedly owes $2.8 billion in claims, as discovered via a recent 3AC creditors meeting. Additionally, the claim amount might be understated, as numerous have either not provided their claim and have not disclosed their claim amounts for reasons of confidentiality.
As relayed through DrSoldmanGachs, the meeting dicated to elect a creditor committee comprising Digital Currency Group, Voyager Digital, Blockchain Access Matrix Port Technologies and CoinList Lend. These five parties above represent roughly 80% of the present degree of claims.
3AC assets are thought to be made up of banking account balances, direct crypto holdings, underlying equity in projects and nonfungible tokens. During the time of publication, it’s unclear just how much within the fund’s equity remains. This past year, the hedge fund apparently held $6 billion in assets and $3 billion in liabilities.
Via a number of highly-leveraged bullish directional bets with lent money from major crypto institutions, 3AC grew to become insolvent among the continuing cryptocurrency bear market. Its founders allegedly fled and defaulted on loan repayments which were left out, resulting in a major contagion among centralized finance firms tha given money to 3AC.
Each of 3AC’s co-founders, Su Zhu and Kyle Davies, couldn’t be discovered following the fund’s blowup. Ironically, Su Zhu is allegedly claiming $5 million from 3AC, while Chen Kaili Kelly, wife of Kyle Davies, is allegedly claiming $66 million. However, such claims are apparently quasi-equity and subordinate towards the distribution of leftover assets, or no, to creditors.
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Determination number of large directional trades (GBTC, LUNA, stETH) and borrowing from 20+ large institutions, Three Arrows Capital (3ac) went bust.
Then your founders ran, and also the loan defaults have result in mass contagion in crypto.
— Jack Niewold (@JackNiewold) This summer 18, 2022
