If you’re new to the Litepaper, let’s catch up on what’s happening.
- One of the largest and easily most well-known international crypto hedge funds, 3AC, had a ton of exposure to Luna ($LUNA.X) and TerraUSD ($UST.X).
- TerraUSD collapses, taking Luna with it.
- 3AC’s exposure causes a domino effect to its portfolio, and the broader crypto market collapses.
- 3AC had a metric crap ton of loans from entities such as BlockFi ($BLOCKFI.P), Genesis Trading, Celsius ($CEL.X), and Voyager Digital ($VGX.X). Celsius and Voyager have since filed for bankruptcy.
- The founders of 3AC are rumored to have been incommunicado with their creditors and are silent on social media.
Fast forward to today, and the ‘missing’ founders of 3AC have made their first public comments in weeks. In an interview with Bloomberg, Su Zhu and Kyle Davies deny avoiding their creditors. But, Zhu said, “We have been communicating with them from day one.”
Zhu denied that he and Davies hid money from liquidators or funneled any to secret wallets/accounts. He (Zhu) also addressed rumors he recently bought a yacht. He claimed a yacht was bought last year.
Zhu and Davies blamed the collapse of Luna and UST as the trigger that set off a cascade of liquidations in 3AC’s positions. In addition, an arbitrage of its Grayscale Bitcoin Trust ($GBTC) positions changing from a premium to a discount added further pressure.
Zhu and Davies claim to have received death threats and intend to keep a ‘low profile’ until they can move to Dubai. As always, the Litepaper will keep you updated as this story develops. 🤬