In a recent interview with Bloomberg, the two co-founders of Three Arrows Capital, Su Zhu, and Kyle Davies have jointly admitted that overconfidence, which came from the humbled bull market, was the reason behind the collapse of the firm.

They said some bad decisions they made during the bull market should have been avoided if not for overconfidence.

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Zhu discussed their ties with Terra (LUNA) founder Do Kwon and claimed they thought there were greater things ahead for the company.

In his statement, closeness with Do Kwon boosted their overconfidence, which made them ignore a number of red flags when the firm was still in full operation. This later liquidated $500 million worth of investment.

Read Also: Three Arrows Capital (3AC) Files Chapter 15 Bankruptcy, Seeking to Defend its US Assets

Su Zhu noted:

“If we could have seen that, you know, that this was now like, potentially like attackable in some ways, and that it had grown too, you know, too big, too fast.”

Bitcoin (BTC) Crash Initiated Major Setback

The two founders further claimed that Terra (LUNA), now Luna Classic (LUNC), was a also setback for the firm. But the major problem was initiated by the crash of Bitcoin (BTC) to $20,000, making it impossible for the firm to access additional credit.

According to Zhu, business continued as usual after the collapse of Terra (LUNA) but Bitcoin (BTC) collapse made the matter worse.

Zhu explained: “Throughout that period, we continued to do business as usual. But then yeah, after that day, when, you know, Bitcoin went from $30,000 to $20,000, you know, that, that was extremely painful for us. And that was in, that ended up being kind of the nail in the coffin.”

Read Also: $559.6 Million Used By Three Arrows Capital (3AC) to Acquire Locked LUNA Now Worth $670

Why They Disappeared and Their Whereabouts

Speaking on their whereabouts and why they suddenly disappeared, the 3AC founders said they both went underground due to a series of death threats they were directed at them. However, they didn’t reveal their current location but said they were moving to Dubai.

Disclaiming other allegations, the founders said they didn’t withdraw any money from 3AC before it went bankrupt.

Regarding the $50 million yacht that was disclosed in the recently filed lawsuit, Zhu said that the boat was bought over a year ago and commissioned to be built and to be used in Europe. He also claimed that the yacht has a full money trail.

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The post 3AC Founders Reveal Ties to Terra (LUNA) Founder Do Kwon, Say Overconfidence Initiated the Collapse appeared first on Times Tabloid.

In the blockchain newsletter for the month of June 2022, Pantera Capital explained what triggered the fiascos mentioned above.

For Terra ecosystem, the firm said the crypto industry’s detractors will certainly term the incident as a big deal of failure, but it cannot overshadow blockchain’s utility and promises.

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Explaining further, the firm stated that the Terra ecosystem’s collapse is similar to the dot.com era when some experiments worked, while others failed. This led to the failure of Pets.com but didn’t mean the internet has no viable utility. It only means that one business model wasn’t right for the time.

So, the newsletter says LUNA’s failure only means that one type of algorithmic stablecoin failed to work as planned, which does not imply that blockchain technology has failed.

Read Also: Three Arrows Capital (3AC) Files Chapter 15 Bankruptcy, Seeking to Defend its US Assets

Pantera Capital noted:

“There’s a ton of stress about whether Tether is fully backed by collateral.  In 2019 they admitted it wasn’t.  It serves its purpose – shadow banking system.  However, most stablecoins, like Coinbase and Circle’s USDC are fully backed with treasury bills, very transparent, and audited. 

“You have to work through some of these experiments. Ultimately, that vast majority of the stablecoin market will look just like USDC and FedCoin.”

For Celsius, the company wrote:

“Celsius is a centralized crypto lending business.  Their business model is:  you deposit USDC, ETH, some sort of cryptocurrency, and they promise a yield on it.“

“What ended up happening is they put a bunch of those assets into either very risky projects or into things that have a long liquidity horizon.  Classic leveraged lending model – borrow short-term, lend long and risky. 

“The liquidity mismatch where you have customers who expect to be able to withdraw their funds within 24 hours, but you have assets that may be locked up for months.  Celsius ended up freezing withdrawals and were forced to sell a huge amount of crypto over the last week, which is part of what caused a cascade in prices.”

Read Also: $559.6 Million Used By Three Arrows Capital (3AC) to Acquire Locked LUNA Now Worth $670

Regarding the current issue faced by Three Arrows Capital (3AC), Pantera Capital said:

“Similar situation with Three Arrows Capital, known as 3AC.  Very leveraged with liquidity mismatches. They weren’t able to meet their margin calls.  They ended up being a forced seller in a time where there wasn’t that much liquidity in the markets.

“The markets are very efficient.  With a 70-90% downdraft we probably have worked through most of the problems.  We think these events have mostly washed through the crypto space.”

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The post Pantera Capital Highlights Terra (LUNA), Celsius, and Three Arrows Capital’s Fiasco appeared first on Times Tabloid.

Major Development 

Three Arrows Capital (3AC), founded by Zhu Su and Kyle Davies, managed an estimated $10 billion of assets as of March, according to on-chain analytic firm, Nansen.

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As the crypto market moved into the bear season and has been lingering, Three Arrows Capital (3AC) has been among the most affected big players in the industry. Other crypto firms like BlockFi and Celsius Network are in similar shoes.

Due to Three Arrows’ liquidity inadequacy, which resulted in its inability to pay clients, the company was issued a liquidation order by a court in the British Virgin Islands (BVI).

While the company’s liquidation takes effect in the British Virgin Islands, the capital venture firm has initiated a move to protect its US assets from being confiscated, by filing a Chapter 15 bankruptcy petition.

To note, Chapter 15 bankruptcy filings stop creditors from seizing a company’s assets in the United States.

Per a report by Bloomberg, the law firm, Latham & Watkins representing Three Arrows Capital (3AC) filed the bankruptcy petition in New York on July 1. The petition is tagged, “Three Arrows Capital Ltd and Russell Crumpler, 22-10920, U.S. Bankruptcy Court for the Southern District of New York (Manhattan).”

Related: Here’s How LUNA and UST Collapse Caused stETH  De-pegging; Celsius and 3AC Liquidation Problems: Nansen

Three Arrows Capital (3AC) CEO Seeks Solution

As the problem continues to heat up for the crypto hedge fund, Zhu Su, the co-founder of Three Arrows Capital (3AC) is seeking to offload one of his luxury homes in Singapore in a bid to try and salvage the situation. The said mansion was bought for $35 million, Bloomberg said. 

Meanwhile, Nansen, a blockchain analytic firm, has studied the current problem faced by Three Arrows Capital and Celsius Network using on-chain data. The firm stated that the insolvency problems of both companies trace to the de-pegging of TerraUSD (UST) and a subsequent LUNA crash.

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The post Three Arrows Capital (3AC) Files Chapter 15 Bankruptcy, Seeking to Defend its US Assets appeared first on Times Tabloid.

Celsius Network, an interest-earning yield platform, and crypto hedge fund, Three Arrows Capital (3AC), have been hit hard with liquidity and insolvency problems as bears take their turn in the crypto market.

The Terra Collapse Factor

From the evidence and result derived via Nansen’s recent on-chain data forensics, the withdrawal of almost $800 million altogether by Three Arrows Capital (3AC) and Celsius from Curve’s main liquidity pool was triggered by the Terra ecosystem’s collapse. 

Nansen reports that this huge withdrawal was done between May 7 and May 16 which happens to be the days when UST de-pegged, followed by the free fall of LUNC.

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Precisely, on May 12, Three Arrows Capital removed $400m of liquidity (128k stETH + 73k ETH) from the stETH/ETH Curve pool in a single transaction. Meanwhile, Celsius took out $380m of liquidity on the same day in three separate transactions, the Nansen report shows.

To note, the main liquidity pool on Curve saw a decline in more than half of its total value locked as a result of the large withdrawals (almost $800 combined) executed by Celsius and 3AC.

Per the report, an accompanying liquidity crisis was seen on Curve as reflected in the pool’s imbalance which left the stETH price negatively exposed.

In addition, the report stated, “as stETH cannot be redeemed for ETH until after the Merge, the primary way to obtain liquidity on large stETH positions is through Curve.”

Meanwhile, Curve’s liquidity pool imbalance that left stETH vulnerable could not recover after Terra’s collapse, due to the resulting poor market conditions.

This means that liquidity was dried out for stETH on the Curve defi platform. Thus, there was no other avenue for large stETH holders such as Celsius Network to cover their positions.

This was what led to the interest-earning yield platform halting users from making withdrawals, swaps, and transfers since June 13 in a bid to stabilize liquidity and operations.

.@CelsiusNetwork is pausing all withdrawals, Swap, and transfers between accounts. Acting in the interest of our community is our top priority. Our operations continue and we will continue to share information with the community. More here: https://t.co/CvjORUICs2

— Celsius (@CelsiusNetwork) June 13, 2022

Related: $559.6 Million Used By Three Arrows Capital (3AC) to Acquire Locked LUNA Now Worth $670

Nansen Explains Staked ETH (stETH) De-pegging

Staked Ethereum (stETH) which is still subject to price discovery is a derivative of ETH. stETH tokens are designed to closely track the value of ETH. Notably, stETH has traded on par with ETH (1:1) until the UST and LUNC descent. 

Therefore, the deviation of stETH:ETH from the 1:1 ratio can be dated back to the UST and LUNC crash incident in May.

According to the blockchain analytic firm, many depositors of bETH hurriedly bridged back their assets to the Ethereum mainnet as UST de-pegged. The aim here was to secure their funds in fear of Terra being compromised, which later happened.

In other words, users bridged back and unwrapped their bETH for stETH via the Lido Finance platform. Meanwhile, bETH flows to and from the Terra chain through the Wormhole bridge.

“Bonded ETH (bETH) are wrapped tokens of Lido Finance’s staked ETH (stETH), refitted to interact with Anchor smart contracts. More so, Bonded ETH tokens are used as collateral to borrow Terra stablecoins from Anchor.”

Nansen on-chain forensic reveals that 615,980 bETH was bridged back to Ethereum during that Terra collapse period. It also shows Celsius Network and Hodlnaut were some of the top recipients of the bETH.

Part of the Nansen report said;

“From May 7, Wormhole’s bETH holdings fell from a peak of 667k to 32k within four days – a 95% drawdown. Similarly, Anchor’s vault also experienced an abrupt fall of over 96% from its high of 665k stETH to 26k stETH. This reduction is analogous to flows from Terra to Ethereum, as investors were immediately unwrapping their bETH for stETH after bridging back.”

“Of the 615,980 bETH bridged back to Ethereum from Terra, 604,716 were converted back to stETH within the first week between May 7 and May 16 since Anchor’s vault is essentially a proxy to mint bETH and, after the implosion, there was no reason to hold bETH. Similar to bETH flows, May 12 had the most significant volume for stETH DEX trades. The dashboard below shows that many of the largest holders unwrapped their bETH back to stETH.”

Additionally, Nansen forensic shows that there was a corresponding high sell pressure from stETH into ETH in the stETH/ETH Curve pool. It is said these sellers were either deleveraging their positions and/or getting bETH from Terra and selling it on Mainnet as stETH.

This then led to the huge balance reduction in Curve’s main liquidity pool. Thus, resulting in the de-pegging of stETH.  Meanwhile, Three Arrows Capital (3AC) was the largest recipient of stETH withdrawn from the main stETH/ETH Curve pool.

Read Also: Chainalysis Pinpoints Large Trades That Triggered TerraUSD (UST) and Terra (LUNA) Collapse: Details

Big Players Take the Blow

On the whole, Nansen finalizes that the plummeting of UST and old LUNA tokens played a key role in the de-pegging of stETH/ETH. Accordingly, the incident is said to be the major contributor to the insolvency problem faced by market participants such as Three Arrows Capital (3AC) and Celsius. 

The Singapore-based crypto hedge fund, Three Arrows Capital (3AC), which appears to be the most impacted, has been issued a liquidation order by a British Virgin Islands (BVI) court. On the other hand, Celsius halted its operations on June 13.

On the other hand, Nansen submits that Terra’s collapse was the consequence of investment decisions made by several well-funded entities. In another news, Uppsala Security reveals slush funds amounting to $3.6 billion in UST and USDT, used by Do Kwon’s TFL to manipulate the price of UST.

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The post Here’s How LUNA and UST Collapse Caused stETH  De-pegging; Celsius and 3AC Liquidation Problems: Nansen appeared first on Times Tabloid.

After the historic crash of the LUNA token in May, efforts were made to get the Terra ecosystem back on track, which led to the creation of an entirely new blockchain codenamed Terra 2.0. This new blockchain gave birth to a new native token LUNA 2.0.

Read Also: Caught: “Mystery” Wallet with 20 Million LUNA Airdrop That Was Voting on Do’s Own Proposal Belongs to Do Kwon

Following the launch, the holders of the relatively valueless old LUNA (LUNC) were airdropped the new token LUNA 2.0, which started trading at around $30 on ByBit after launch. But it has since lost its value massively and trading at $2.46 at the time of writing, according to CoinMarketCap.

This indicates that nothing has changed yet for LUNA investors and it’s not certain if things will get better for the Terra ecosystem anytime soon.

Three Arrows Capital’s $559.6 Million Investment in Locked LUNA Now Worth $670

Obviously, the current bear market has reached everyone in the crypto industry at different levels. It’s made the future of the crypto hedge fund Three Arrows Capital hang in the balance as the firm faces potential insolvency after being liquidated by its lenders.

According to reports, the investment firm is in the process of figuring out how to repay lenders and other counterparties after seeing liquidation totaling at least $400 million. And Three Arrow Capital co-founder Zhu Su’s recent tweet has confirmed that the firm is indeed in distress.

Zhu Su tweeted, “We are in the process of communicating with relevant parties and fully committed to working this out.”

Read Also: Do Kwon Refutes Cashing Out $2.7 Billion Worth of LUNA and UST Before the Crash, Shares His Side of the Story

It’s also in the news that the firm shared in the collapse of the Terra (LUNA) ecosystem.

As tweeted by FatMan, a member of the Terra Research forum, Three Arrows Capital (3AC) bought 10.9 million locked LUNA for $559.6 million. The bad news for the firm is that the whopping token is now worth around $670.

FatMan tweeted, “If you’re ever feeling down or angry at yourself about UST/LUNA, don’t beat yourself up too much over it. It was highly sophisticated deception. A lot of brilliant minds fell for it.

“For example, Three Arrows Capital bought 10.9M locked LUNA for $559.6m – it’s now worth $670.45.”

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The post $559.6 Million Used By Three Arrows Capital (3AC) to Acquire Locked LUNA Now Worth $670 appeared first on Times Tabloid.

In late November, Three Arrows Capital CEO Zhu Su, was in the news for revealing, in a series of tweets, that he has abandoned Ethereum (ETH) despite being a stern supporter in the past.

Read Also: Crypto Enthusiasts Raise $47 Million in Ethereum (ETH) To Purchase Rare Copy of U.S. Constitution

Zhu Su tweeted, “Yes I have abandoned Ethereum despite supporting it in the past. Yes Ethereum has abandoned its users despite supporting them in the past. The idea of sitting around jerking off watching the burn and concocting purity tests, while zero newcomers can afford the chain, is gross.”

After a few hours on the same day, Zhu Su tweeted to soften his earlier stance regarding the largest smart contracts platform, Ethereum (ETH).

“Want to soften this and say abandon is the wrong word. Was heat of the moment. I’m sorry. There are great teams working on scaling Eth on L2. Would’ve preferred to see eth1x roadmap. Also would’ve preferred focusing on users rather than holders welfare in upgrades.”

Want to soften this and say abandon is the wrong word. Was heat of the moment. I'm sorry.

There are great teams working on scaling Eth on L2.

Would've preferred to see eth1x roadmap. Also would've preferred focusing on users rather than holders welfare in upgrades. https://t.co/N3YTAbfVBi

— Zhu Su (@zhusu) November 21, 2021

Read Also: Ethereum (ETH) Outflows from Exchanges Surge to New All-Time High, Signal “Buy the Dip” Sentiment

Colin Wu, a blockchain journalist, who reported the huge purchase, stated that the Crypto Hedge Fund continued its accumulation bid after the initial transfer of 91,477 ETH surfaced online on 7th December.

Colin Wu tweeted, “Since the transfer of 91,477 ETH from the exchange on December 7, Three Arrow Capital has frequently interacted with the exchange, and a total of 22,416 ETH has been transferred from the exchange in the past week.”

Since the transfer of 91,477 ETH from the exchange on December 7, Three Arrow Capital has frequently interacted with the exchange, and a total of 22,416 ETH has been transferred from the exchange in the past week.

— Wu Blockchain (@WuBlockchain) December 14, 2021

Read Also: Ethereum Users Will Soon Be Able To Make Private Transactions As Tornado Cash Set To Launch On Arbitrum Layer Two Network

Earlier in December, the crypto hedge fund moved nearly 168,954 ETH in tranches of 91,477 ETH and 77,477 ETH from FTX, Binance, and Coinbase to the wallet marked by Nansen as Three Arrows Capital.

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The post Amid Price Dips, Crypto Hedge Fund Three Arrows Capital Buys $56 Million Worth of Ethereum (ETH) appeared first on Times Tabloid.