Sources: crypto hedge fund Three Arrows Capital faces an uncertain future after a $400M+ liquidation; CEO Su Zhu: we are “fully committed to working this out”

Frank Chaparro / The Block :

The Block 2022-06-16 Frank Chaparro

Discussion

@danny8bc Danny on x
11) What we learned is that they were leveraged long everywhere and were getting margin-called. Instead of answering the margin calls, they ghosted everyone. The platforms had no choice but to liquidate their positions, causing the markets to further dump.
@zhusu @zhusu on x
We are in the process of communicating with relevant parties and fully committed to working this out
@paoloardoino Paolo Ardoino on x
1/ Tether reduced almost 50% its CP holdings since 31st March 2022. By end of June only 8.4B CP left. CP exposure going to be reduced to 0. No exposure to Celsius on our reserves. Liquidated without losses. No exposure to 3AC. https://twitter.com/...
@onchainwizard @onchainwizard on x
This wallet (tagged as 3AC on Nansen) has been aggressively paying back AAVE debt against its 223k ETH / $264mm position to avoid liquidation. With $198mm in borrowings against it, @ a 85% liq threshold, a -11% move in ETH to $1,042 liqudates it https://etherscan.io/... https://t…
@hodlkryptonite @hodlkryptonite on x
Why Celsius and 3AC going under should cause you to worry 1/x
@hodlkryptonite @hodlkryptonite on x
3/x - First of all, 3AC collapse is monumental. This is because they borrow from EVERY SINGLE MAJOR lender. Think BlockFi, Genesis, Nexo, Celsius. Expect every lender to take on hits from 3AC
@nexo @nexo on x
.@Nexo has $0 exposure to Three Arrows Capital. Nexo has always differentiated itself from others as being a very conservative lender with stringent risk management and strict over-collateralization requirements, regardless of borrowers' reputation. https://www.theblock.co/...
@sobylife @sobylife on x
People gave 3AC flack for “using twitter for exit liquidity” They clearly put their money where their mouth is, let this be a lesson for all of us.
@hodlkryptonite @hodlkryptonite on x
15/x - In essence, the collapse of a major fund and a major lender will shrink overall credit in the system and lead to continued deleveraging. So far we have had a orderly liquidation but more people need to delever still.
@stacyherbert Stacy Herbert on x
The sort of VC that is gonna get liquidated on stupid staking tricks and dumb ape jpegs is the sort of fund that attracts far more capital than those who just build The liquidations will continue for the former ... but so will the building by the latter https://twitter.com/...
@danny8bc Danny on x
12) However they still have assets on a number of platforms (you know who you are). We call for you to freeze their assets so that those who 3AC owes can be paid back in the future after legal proceedings.
@coryklippsten Cory Klippsten on x
#Celsians, $CEL bagholders, @Mashinsky cultists, current and ex-members of @celsiusnetwork, and casual observers, it looks like the primary source of the stEth depeg has been found: 3 Arrows Capital. Choice quotes from the article in thread below... https://thedefiant.io/...
@lawmaster @lawmaster on x
Rumors about 3AC margin called, Celsius illiquid and done, Terra blew up, a lot of funds lost like 90% of their capital, Coinbase firing 20% of all employees. How much worse can things really get anon? This is oof city
@defiyst @defiyst on x
With ETH nuking this 3AC wallet is ABOUT to be liquidated. Liq price ~ $1,018 ETH. All eyes on ChainLink oracle now https://zapper.fi/...
@nexo @nexo on x
Оver 2 years ago, we declined 3AC's request for unsecured credit. We learned that they acquired it elsewhere. It is now obvious that Nexo's approach was correct. This is why our assets exceed our liabilities: https://real-time-attest.trustexplorer. io/ nexo
@danny8bc Danny on x
We trade in one of 3AC's trading accounts. This morning they took about ~1m out of our accounts. I hope you pay us back asap. https://twitter.com/...
@twobitidiot Ryan Selkis on x
1/ Rumors + speculation: 3AC was unfortunately on the wrong side of two synthetic trades - with size - in GBTC and stETH. In other words, a temporary condition vs fundamentally bad bet which may be why they have a shot at fighting through an insolvency. https://twitter.com/...
@buccocapital @buccocapital on x
I feel like I wake up to absolute chaos in the crypto market every single morning Honest question: Does this matter at all to the economy? Like, is there a spillover risk? Or are we just draining unproductive excess bullshit Genuinely curious. Please let me know. https://twitter.…
@lawmaster @lawmaster on x
Don't really understand why 3AC would send $90M of FTT on KuCoin instead of FTX. Some weird things going on https://etherscan.io/... https://twitter.com/...
@midasthefool @midasthefool on x
Current #3AC situation summarized: 3AC has $245M of $ETH deposited on lending platform @AaveAave From this, they have borrowed $189M in $USDC and $USDT This puts their Loan-to-Value ratio at ~77% They must keep this below 85%
@cobie @cobie on x
gm (or not)
@defiyst @defiyst on x
With Celsius out the clear in the short-term with their on-chain positions, all eyes are now on 3AC. 3AC supposedly owns this wallet, and 8k ETH has just been liquidated - 0x716034c25d9fb4b38c837afe417b7f2b9af3e 9ae https://twitter.com/...
@autismcapital @autismcapital on x
212,000 ETH are inches away from being liquidated. That's $225M. https://twitter.com/...
@lawmaster @lawmaster on x
We are slowly but surely approaching the territory where exchanges might have to deploy the famous “We're performing an unscheduled maintenance” card all at the same time 🫡
@swissborg @swissborg on x
SwissBorg is proud to confirm that we have 0 exposure to 3AC capital and any unsecured loans. Our #yield is built on the safest #DeFi protocols (unlike most CeFi offers), making us immune to the collapse of the counterparties of #CeFi yield providers
@ryansadams Ryan Sξan Adams on x
Update: ✅ Luna ✅ Celsius ✅ 3AC 🔲 ____________ Who's next? https://twitter.com/...
@jasonyanowitz @jasonyanowitz on x
Thoughts on 3AC 1) Markets will humble anyone who uses leverage 2) Synthetic assets are riskier than they appear 3) Don't root for others to fail 4) Su and Kyle are legends - hoping they pull through
@tradermayne Mayne on x
Ppl are slowly learning that the reason they don't have any money left isn't because of 3ac, Sam or any other VCs or funds. It's their own shitty decision making.
@nope_its_lily Lily on x
Crypto winter started with a Ponzi collapsing (Wonderland), culminating with an EM currency crisis (LUNA), the collapse of a shadow bank (Celsius), and the struggle/???/potential default of a prominent hedge fund (3AC). 2008 says hi
@cz_binance @cz_binance on x
It's a bloodbath out there. Hunker down. Make sure you can last.
@altcryptogems @altcryptogems on x
Celsius being illiquid, $LUNA blowing up, loads of funds losing 90%+ of their value, Coinbase firing 15% and Crypto firing 10% of their employees, rumors about 3AC being margin called. It's a slaughter out there. How much worse can it get? Hopefully the bottom is near.
@0xtuba @0xtuba on x
3AC is one of the largest funds in crypto. At peak, it had over 5 billion dollars of assets and owned hundreds of thousands of ETH. As of today, it appears insolvent, and it's taking the whole crypto market with it. The 3AC Thread: 👇🧵
@coinbureau @coinbureau on x
Now that the 3AC rumours appear to be true, the question shifts to how many counterparties they were exposed to? And will these counterparties have to adjust their books given their own exposure? Hoping for an orderly resolution, but markets sometimes aren't orderly...
@thinkingusd Flood on x
All of the people mocking 3AC... you guys are broke and will never achieve 1/10000th of what they've accomplished. Fuck off
@alexhern @alexhern on x
every single Tether statement fits the format of “my unregulated shadow bank's statement that [subject of statement] is raising a lot of questions answered by the statement” https://tether.to/...
@econoar @econoar on x
Turns out 3AC actually abandoned Ethereum because they have no money to pay for gas fees.

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Sources: crypto hedge fund Three Arrows Capital faces an uncertain future after a $400M+ liquidation; CEO Su Zhu: we are “fully committed to working this out”

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