3AC cofounders resurface after five weeks, deny allegations

Three Arrows Capital (3AC) cofounders Su Zhu and Kyle Davies denied allegations by 3AC liquidators that they moved money out of the crypto hedge fund before its collapse.

See related article: 3AC founders moved money out of troubled hedge fund, allege liquidators

Fast facts

• Zhu and Davies claimed that they were forced into hiding due to death threats, but they have been “communicating with all relevant authorities,” contradicting the liquidators’ claims of non-cooperation, according to an interview given to Bloomberg. 
• The cofounders, who are reportedly relocating to the United Arab Emirates from Singapore, said they suffered extensive losses from the “regrettable” collapse of 3AC. 
• Zhu said: “We positioned ourselves for a kind of market that didn’t end up happening,” attributing the cause of the collapse to their optimism fueled by a multi-year bull market.
• Zhu acknowledged heavy losses with the collapse of Luna and said that the cofounders’ personal relationship with Terra founder Do Kwon may have blinded them to Terra’s vulnerabilities. 
• 3AC also suffered deep losses when Grayscale Bitcoin Trust shares started trading at a discount to the price of Bitcoin. 
• In court filings, 3AC liquidators alleged that Zhu and Davies made a down payment on a yacht while the fund was going down, but Zhu said the yacht was bought over a year ago and had “a full money trail,” rejecting allegations of living a luxurious life.

See related article: Three Arrows Capital files for Chapter 15 bankruptcy