In the fast-paced world of cryptocurrency, Three Arrows Capital was once a towering figure. Founded in 2012 by Kyle Davies and Su Zhu, the Singapore-based hedge fund soared to great heights, managing billions in assets. However, its recent collapse has sent shockwaves through the crypto community, affecting even the portfolios of small-time investors like me.
RIDING THE BITCOIN WAVE: MY PERSONAL JOURNEY
I’ve been an avid participant in the Bitcoin craze. Watching the value of my portfolio surge during the bullish trends was exhilarating. Bitcoin, hailed as a revolutionary digital currency, promised financial independence and a hedge against traditional economic uncertainties.
THE DEGEN TRADING GAMBLE: THREE ARROWS’ HIGH-STAKES GAME
Enter Three Arrows Capital, a name that resonated with authority in the crypto sphere. The hedge fund engaged in what some have called “degen trading,” high-risk strategies that mirrored a wild gambling spree. Using borrowed billions, Three Arrows Capital placed bold bets, not unlike a gambler at the casino.
IMPACT OF THE CRYPTO FALLOUT: LOSSES AND LIQUIDATION
The tides turned in 2022 as the crypto market faced a severe downturn. Three Arrows Capital, heavily invested in projects like Luna and TerraUSD, suffered colossal losses. The fund crumbled under the weight of its debts, leading to liquidation orders and a whopping $3.5 billion in creditors’ claims.
THE PERSONAL TOLL: MY PORTFOLIO TAKES A HIT
As a small-scale Bitcoin investor, the aftermath of Three Arrows’ downfall hit home. The fund’s mismanagement and excessive risk-taking contributed to the broader market crash, causing a dent in portfolios across the globe. The once-thriving crypto landscape now bore the scars of a giant’s fall.
SEARCH FOR ACCOUNTABILITY: THREE ARROWS’ NEGLIGENCE
Questions abound regarding Three Arrows Capital’s accountability. The founders, Kyle Davies and Su Zhu, faced regulatory reprimands for breaching allowed thresholds and providing false information. Their negligence in implementing a proper risk management framework only added fuel to the fire.
REGULATORY INTERVENTION: TOO LITTLE, TOO LATE?
The Monetary Authority of Singapore (MAS) stepped in, slapping nine-year bans on Davies and Zhu, preventing them from participating in regulated capital market services. While this regulatory intervention seeks to address the aftermath, many wonder if it’s too little, too late for those who have already borne the brunt of the fallout.
THE LIQUIDATION SAGA: THREE ARROWS’ REFUSAL TO COOPERATE
Three Arrows Capital’s liquidation process unfolded like a saga. The founders, Davies and Zhu, reportedly remained uncooperative. The inability to meet margin calls, failure to repay loans, and a court-ordered liquidation all point to a lack of transparency and responsibility.
THE ARREST OF SU ZHU: JUSTICE IN THE CRYPTO WORLD
In a surprising turn of events, Su Zhu, one of the co-founders, was arrested at Changi Airport in Singapore. The arrest came as a result of committal orders, with Zhu sentenced to four months in prison for failing to cooperate with the company’s liquidators. The arrest highlights a growing need for accountability in the crypto space.
THE AFTERMATH: SEEKING RECOVERY AND JUSTICE
As Three Arrows Capital faces the consequences of its actions, the liquidators are on a mission to recover assets and seek justice for creditors. The founders, Davies and Zhu, owe a staggering $1.3 billion, and the pursuit of accountability is now a focal point in the post-collapse narrative.
CONCLUSION: LESSONS LEARNED AND LOOKING AHEAD
The Three Arrows Capital debacle serves as a sobering lesson for cryptocurrency enthusiasts like me. It underscores the importance of due diligence, responsible investing, and the need for a robust regulatory framework in the crypto space. As I reflect on the impact on my own portfolio, I can’t help but hope for a more accountable and secure future for Bitcoin and the entire crypto community.
1Bitcoiner.com 
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