Three Arrows Capital Co-founder Breaks Silence Accusing Liquidators of ‘Baiting’

Zhu Su, co-founder of the debt-laden crypto hedge fund Three Arrows Capital (3AC), broke his month-long silence Tuesday morning via Twitter saying their good faith to cooperate with liquidators was met with baiting. 

“It has come to our clients' attention that you have made an application in the United States of America, alleging that they have not been cooperating with you in any meaningful way, and detailing some of the discussions, and the manner in which we had them, on 8 July 2022,” the first screenshot read, written by Christopher Anand Daniel, managing partner of Advocatus.

The second screenshot Zhu shared addressed the company’s relationship with Israeli crypto startup StarkWare, and whether 3AC’s liquidators have exercised the right to buy a StarkWare token. 3AC previously invested in the Isreali startup which now has a valuation of $8 billion. 

“In these capacities, they [our clients] are extremely concerned by the Liquidators' failure to exercise StarkWare's token purchase offer ("StarkWare Exercise"), a fact that was confirmed by you in the call on 8 July 2022.”

The liquidators Zhu is referring to are liquidators helping 3AC with their June 29, British Virgin Island court ordered liquidation, following massive insolvency problems. A couple days after that, 3AC filed for Chapter 15 bankruptcy in New York. 

The brunt of their insolvency issues came in the aftermath of the Terra Network’s collapse, which caused an overall market downward spiral and sell-off. 3AC was heavily invested in one of the Terra Networks cryptocurrencies, LUNA,  which lost 99% of its value in the course of a week. 

While other co-founder Kyle Davies said 3AC was able to handle the Terra Network crash, they weren’t able to stay afloat in the post-crash market. 

Author: Tyler Irvin

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