E Point Perfect

3AC Founder Reveals Reason Behind Fall


article image

Arman Shirinyan

One of victims of Terra implosion speaks about FTX’s role in their bankruptcy

The notorious fund that became the victim of the infamous Luna and TerraUSD crisis had significant exposure to FTX and its underlying FTT token, which could have been the reason behind the entity’s eruption.

Zhu Su, the man behind the Three Arrows Capital fund, revealed in his most recent Twitter thread his fund’s relationship with the prominent cryptocurrency exchange. The most interesting part is FTX’s role in the fund’s performance.

Reportedly, FTX HK employee Clement has been leaking 3AC’s position on the market and other details to “many people” throughout the year. Technically, by leaking the information of one of the biggest funds in the industry, it becomes easier to liquidate most of its positions, causing a significant plunge in their performance.

According to Kyle Davis, FTX CEO Sam Bankman-Fried had been hunting the fund, and it had a massive hole on its balance sheet. Technically, after the Terra implosion, most assets held by 3AC lost up to 80% of their value, causing the liquidation of the fund. This was the final blow to funds that were already on the verge of bankruptcy.


To be fair, SBF was not the only or the principal reason behind the fund’s failure. Undercollateralized loans, illiquid positions and exposure to unstable projects are three main causes behind the bankruptcy of the fund.

However, the information that FTX and SBF personally had could have been easily used against the funds, especially in periods when it was most vulnerable and unable to provide liquidity to cover losses.


Source link

Related posts

Crypto Needs Strong Oversight: US Treasury

XRP and Ripple Receive Six Times More Briefs in Support Than SEC

Judge OKs More Amicus Curiae Briefs in Support of Defendants

VeChain’s Biggest Mainnet Hard Fork Set to Deploy, Price Reacts

Crypto News Digest by U.Today

Crypto News Digest by U.Today