Three Arrows Capital (3AC): The next crypto player to fall due to the current bear market?

3AC, victim of his own greed – That bear market we go through right now can feel violent and intractable. Many crypto companies are in trouble. That blockchain Terra (LUNA) paved the way for what appears to be a fall of dominoes, with his release stablecoin UST to the dollar. Afterwards, Celsius had difficulty loosening its anchors stETH at ETH. Three arrows capital (3AC), a Dubai-based cryptocurrency mutual fund, appears to be the next in line.

Three Arrows Capital in bear market hell

In a bear market environment, the different positions of can 3 AC on it Challenge (decentralized finance) made it suffer liquidation of $ 400 million. However, the company had this week announced moving funds from cryptocurrencies. The goal was then to get these funds out of DeFi to centralized platforms to avoid a liquidation. However, the market did not wait and 3AC had to face the staggering fall of certain cryptocurrencies. Of hundreds of millions of dollars then evaporated.

Thus, rumors were born backed by big names in the crypto-economy, such as Cathie Wood, the former director of Ark Invest. In fact, the crypto expert is wondering if 3AC will be next on the list after Terra and Celsius. But then what are the clues that suggest that 3 AC is at the bottom of the abyss?

Will 3AC suffer the same fate from Terra and Celsius?

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A losing crypto strategy for 3AC

3AC was first peeled off UST and LUNA’s fall, when Terra blockchain crashed. In addition, the company is a major borrower of Celsius, who put his retirements on hiatus on Monday.

The first hints of the company’s difficulties were discovered when one of its co-founders, Sand Zhuhave deleted from his bio references such as “ETH, AVAX, LUNA” and other cryptocurrencies. Mention the reference “NFT” is also removed from the description. Kyla Daviesother co-founder of the company, meanwhile, has his inactive twitter account.

3AC also selects a scrypto strategy strongly criticized. SOL, LUNA or AVAX review e.g. strict tests in the markets. In fact, these cryptocurrencies have lost between 70 and 90% of their value since June 13th. In this context of fierce speculation, 3AC did not resist and the rumor was born.

Where the spark is that Su Zhu persistently defended a bullish thesis and a super cycle in the cryptocurrency market. This proved from the start to be false considering the blows the company received during the Terra crash. The founder himself tweeted at the end of May:

“Unfortunately, the supercycle award dissertation was wrong, but crypto will always thrive and change the world every day.”

Faced with rumors that have been circulating since June 13, Su Zhu is forced to make a mea culpa, a half word:

“We are in the process of communicating with stakeholders and are fully committed to resolving this issue.”

A call to freeze 3AC’s cryptocurrencies

Then the tongues loosen. One of the first companies to speak is the company 8 Block capital (8BC), via Twitter and the voice of its CEO, Danny Yuan. The 2 companies had worked together since 2018. Everything went well. However, whimsical markets decided otherwise. 8 Blocks Capital then decided to make one consequent withdrawal to protect against DeFi risks. Without a response from the community, however, our husband did not worry as the period was busy.

But with blockchain keeping everything in mind, 8 Block Capital eventually discovered it1 million is missing on funds donated to 3AC. Our interested party therefore contacted 3AC again, without success. The businessman adds that 3 AC still has many assets. Therefore, he requested freezing of portfolios of the company on the various DeFi platforms it uses.

Tweet from Danny Yuan requesting that the Three Arrows Capital account freeze
Danny Yuan calls for freezing 3AC wallets on the DeFi platforms he uses – Source: Twitter

“11) What we have learned is that [3AC] had been in debt for a long time. He got margin calls. Instead of answering margin calls, he joked everyone. The platforms had no choice but to liquidate their positions, causing a new dumping of the markets.

12) But it [3AC] still have assets on a variety of platforms (you know who you are). We ask you to freeze his assets so this that 3AC should be repayable in the future after litigation. »

As we write these words, new clues are emerging that point to the crisis that 3AC is going through. FTX, BitMex or even Deribit have left the ship and liquidated the positions of the Dubai giant. The fall of Dominoes seems to have just begun.

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