Three Arrows Capital (3AC) is a cryptocurrency hedge fund that was run by Zhu Su and Kyle Davies from their Singapore and Dubai offices. 

The company bought Bitcoin on leverage using funds from DAOs and CeFi firms that include Voyager and BlockFi. At its peak the fund was worth around $18 billion. Circulating rumors state that Zhu Su even had a $50 million yacht where he would entertain fund owners before pitching investment ideas.

It was reported that 3AC promised fund owners a fixed return rather than allocating capital to non-yield investment products.

When Terra Luna imploded a few weeks ago, the promised yield for the failed cryptocurrency set a cascade of liquidations that could not be kept under control. During the Terra collapse in April, 3AC spent $559.6 million to buy locked Luna that is now worth roughly $670 at the time of this writing.

Currently, there have been no updates or responses from Zhu Su and Kyle. 

A Twitter thread by Otteroooo covers the chronological developments that have occurred over the last week. Below are some of the key points and events from Otteroooo’s thread:

“On 22 June 2022, Voyager announced a loan agreement with Alameda to the tune of $200m USDC and 15,000 BTC.”

“The loan was announced after Voyager admitted to have ~$655m of exposure to failed crypto hedge fund Three Arrows Capital (3AC).”

At the time, Voyager’s Bitcoin holdings alone exceeded the liabilities held on their balance sheet. Alameda also provided loans for Blockfi however they are not required to disclose their privately held assets.


  • At the peak of market highs, the hedge fund was worth around $18 Billion. They are now reported to be insolvent and it is possible that their collapse is affecting other crypto lending platforms in the space.
  • The list of affected parties is a who’s who of the top firms and names in crypto: Voyager, Blockfi, Nexo, Finblox, Lendabit, and 
  • The recent downturn in the market has brought hedge fund manager Murad back to the space. For those unfamiliar, Murad managed a fund that was completely liquidated during the March 2020 crash when Bitcoin went below $4,000. After losing all funds, Murad’s online activity went dormant.
  • Latest: 3AC has defaulted on its loan worth more than $670 Million with Voyager. Voyager announced on the morning of June 27th that 3AC failed to repay $350 Million of USDC and 15,250 Bitcoin.

It is uncertain whether or not more firms will be forced to publicly share their losses in the near future, but it is speculated that more insolvent firms may appear. Recently, Bitcoin fell to levels as low as $17,800 which is the first time Bitcoin has dipped below a previous all time high from a prior cycle after the halving.

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