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Troubled Crypto Hedge Fund 3AC Reprimanded By Singapore’s Monetary Authority, Liquidators Eye Su Zhu’s Properties

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Troubled Crypto Hedge Fund 3AC Reprimanded By Singapore’s Monetary Authority, Liquidators Eye Su Zhu’s Properties

On Wednesday, it was reported that the crypto hedge fund Three Arrows Capital (3AC) was liquidated by a British Virgin Islands court and following the alleged liquidation, the Monetary Authority of Singapore (MAS) has reprimanded 3AC for misleading regulators. Furthermore, reports claim that liquidators in Singapore are attempting to seize the properties owned by 3AC co-founder Su Zhu and his wife.

Monetary Authority of Singapore Accuses 3AC of Misleading Regulators and Exceeding AUM limits

The troubled crypto hedge fund Three Arrows Capital Ltd., otherwise known as 3AC, seems to be facing issues from regulators in Singapore. Since 2012, 3AC was a well known crypto hedge fund that was started by two former Credit Suisse traders — Su Zhu and Kyle Davies. However, after being quite successful, 3AC allegedly invested heavily into Terra’s LUNA after Zhu insisted that crypto companies “don’t want to be blown out during a supercycle.” It is assumed that one issue 3AC dealt with was an investment of $200 million locked luna classic (LUNC) which is now worth less than $1K.

“You don’t want to be blown out during a supercycle”@zhusu on @UpOnlyTV with @cobie and @ledgerstatus pic.twitter.com/fYqCXukGNN

— Gabriel Haines.eth (@gabrielhaines) June 30, 2022

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“There is speculation that the massive losses of [LUNC] caused them to use more leverage to earn it back — Also known as ‘Revenge trading,’” one account explained on June 16. Two weeks ago, The Block’s Frank Chaparro cited sources that said the crypto hedge fund 3AC was liquidated for $400 million. Reports published the same week indicate that 3AC was liquidated by Bitmex, Deribit, Bitfinex, and possibly FTX as well. Sources noted two days ago, that a British Virgin Islands (BVI) court liquidated the hedge fund’s assets as well, but the sources did not disclose what type of assets were allegedly seized.

Following the ostensible BVI liquidation notice, the Monetary Authority of Singapore (MAS) published a press release that says 3AC misled regulators. “The Monetary Authority of Singapore today reprimanded Three Arrows Capital Pte. Ltd. (3AC) for providing false information to MAS and exceeding the assets under management (AUM) threshold allowed for a registered fund management company (RFMC),” the press release reveals. The MAS violation notice mentions that the regulator has been investigating 3AC’s contraventions “since June 2021.”

3AC is also accused of breaching the MAS assets under management (AUM) threshold. “[3AC] exceeded its allowable AUM of S$250 million for a RFMC between July 2020 and September 2020 and between November 2020 and August 2021,” the Singapore regulators detailed. “In light of recent developments which call into question the solvency of the fund managed by [3AC], MAS is assessing if there were further breaches by [3AC] of MAS’ regulations,” the MAS officials added.

Local Report Claims Liquidators Look to Seize Su Zhu’s Million-Dollar Bungalows

Moreover, a local report from Singapore say “rumors” have claimed that liquidators have been eyeing 3AC’s homes and property located in the country. The publication Edgeprop’s reporter Cecilia Chow detailed that records show from 2019 to 2021, Su Zhu purchased three bungalows in Singapore that cost him around $83.55 million.

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The Singapore properties are allegedly in Zhu’s name and his wife’s name as well. In December, Zhu and his wife purchased a 31,863 sq ft home called the “Good Class Bungalow (GCB).” Chow’s report notes that the GCB property was put into a trust for one of Zhu’s daughters.

Chow further details that Zhu’s wife owns a $28.5 million bungalow in Singapore located near the Botanic Gardens at Dalvey Road. The property was acquired in September 2020 and the reporter notes that it is “currently under construction.” The Edgeprop report claims that 3AC and associates collectively own “five high-end properties.”

Chow further says that members of the 3AC team also own an entire fleet of “high-end cars and a yacht.” The well known Terra whistleblower named Fatman has been sharing information about the alleged liquidators in Singapore. Additionally, Fatman claims that a source told him that Su Zhu is desperately looking to sell one of the million-dollar homes in Singapore.

“A verified source has confirmed that Su Zhu is urgently trying to sell his $35m house in Singapore, currently held in his [daughter’s] trust,” Fatman tweeted. “He is requesting the funds to be transferred to a bank account in Dubai and has no intention of paying creditors with the proceeds from the sale.”

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Furthermore, a post on social media shows how Zhu once claimed 100,000 ether was “dust” to him. “Today, he is selling 10 USDC, trying to pay off debt after his $20 [billion] fund imploded. Markets always humble those too arrogant,” the individual who published the social media post explained. “Today, he is sending all the [leftover] balance from his wallets to CEX so that he can get as much money as possible. He just transferred 10 USDC, 3.98 AAVE ($200), 138 SUSHI, 0.1 YFI, 2.5 COMP ($75) and other actual ‘dust’ to various [centralized] exchanges,” the individual added.

Meanwhile, Zhu has not tweeted since June 14, 2022. However, Zhu did change his profile on Twitter as it used to say that the co-founder of 3AC was “Investing in BTC, ETH, AVAX, LUNA, SOL, NEAR, MINA, DOT, [and] KSM.” Today, Zhu’s Twitter profile does not feature the aforementioned crypto assets and simply says “bitcoin,” in addition to his associations with Deribit, Defiance Capital, and Starry Night Capital.

What do you think about the recent MAS press release and the story that says liquidators are attempting to seize Su Zhu’s properties in Singapore? Let us know what you think about this subject in the comments section below.

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Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

3AC

Crypto winter update: Will the disaster of Q2 continue to cripple Q3 of 2022? 

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Crypto winter update: Will the disaster of Q2 continue to cripple Q3 of 2022? 

The collapse of Terra, 3AC, and insolvency crisis across crypto institutions has sent the market into severe bear tendencies over the course of Q2. Despite gradual recovery during July, the broader market remains tense and vulnerable right now. Bitcoin [BTC] is trading just below $22,900 while Ethereum [ETH] is mounting a massive rebound towards $1,600 after news of the Merge release date.

A Quarter to forget

The second quarter of 2022 has been catastrophic for the crypto space. Bitcoin and Ethereum fell 56.3% and 67.4% respectively, recording one of the worst quarterly performances in their history. The collapse of the Terra ecosystem led to a domino effect across space which culminated in billions of losses. The “crypto winter” also consumed liquidity provider Three Arrows Capital and the insolvency of crypto institutions such as Celsius.

CryptoCompare analyzed the events of the second quarter and what they could mean for the crypto industry. Despite the internal tremors of the crypto industry, the macro landscape is labeled as “dire” in the report. The crypto market has been taken aback by these severe market conditions. The alarm bells of a looming recession are well-anticipated in the risk-asset space right now.

The dramatic fall of the crypto market led to a sharp decline in Total Value Locked (TVL) in DeFi. In total, the value has fallen by 65.7% in this quarter. The report claims that this bear market could lead to the development of innovations in the space much akin to the 2008 Financial Crisis. This, in turn, could be the catalyst for the next bull run in the industry.

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“We expect the TVL in DeFi to continue to stay range bound as the price of crypto assets attempts to recover from the current drawdown,” stated the CryptoCompare report.

Regulations and cyber security failures have also been highlighted during this quarter. Janet Yelen, US Treasury Secretary highlighted the risks associated with the crypto space after the Terra explosion. Lawsuits have been filed against Terraform Labs and other related entities in the aftermath of the crisis. The ongoing security crisis has been well-documented in previous reports. Over $1 billion has been stolen in DeFi exploits over the quarter which continues to threaten protocols.

Where does the crypto space stand?

Given the nature of the macro-economic situation, the current price rebound is a mini-rally during the bear market. Market enthusiasts continue to roll out ambitious plans for crypto. But the industry will suffer severely in the growing tensions across the market. Where the industry goes from here still remains a trillion-dollar question for now.

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Kanav is a journalist at AMBCrypto. He has a Masters in Media and International Conflict and is interested in areas of digital society, crypto developments in the political sphere and the socio-cultural impact of a crypto-society.

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2022

Q2 2022 Cryptocurrency Report Highlights Terra’s Collapse And Capital Exiting The Crypto Ecosystem

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Q2 2022 Cryptocurrency Report Highlights Terra’s Collapse And Capital Exiting The Crypto Ecosystem

On July 13, the dedicated crypto price tracking, volume, and market capitalization web portal Coingecko published the company’s “Q2 2022 Cryptocurrency Report” which discusses the last quarter’s crypto market action and insights. The 46-page report explains how the Terra UST and LUNA fallout wreaked havoc on the entire crypto ecosystem and the stablecoin economy. Moreover, Coingecko researchers say “a decrease in the stablecoin market share suggests that a certain amount of capital has completely exited the crypto ecosystem.”

Coingecko’s Data Suggests Q2 Investors Exited Stablecoins Rather Than De-Risking Into Them

Coingecko has published the company’s second quarter cryptocurrency report for 2022 as there’s been a number of significant changes during the last three months. The study, published last Wednesday, notes that Q2 2022 was “filled with many unfortunate events in the crypto space.”

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The crypto firm’s report explains that while spot market trade volumes have remained steady at $100 billion daily, “the top 30 coins have lost over half their market cap since the previous quarter.” Much of the crypto blunder started from a domino effect caused by the Terra UST and LUNA collapse.

Coingecko details that just before UST’s downfall, the stablecoin was the third-largest fiat-based token in existence, and $18 billion was erased in just a few days. The report notes that BUSD managed to become the third-largest stablecoin. Beside’s Terra’s UST, other stablecoin assets saw their valuations suffer and Coingecko’s analysts suspect a specific amount of funds have left the crypto economy. The researcher’s Q2 2022 study says:

The slight decrease (discounting UST) in stablecoin market share suggests that a certain amount of capital has completely exited the crypto ecosystem, in contrast to last quarter when investors likely de-risked into stables amidst market uncertainty.

The Terra and 3AC Fallouts Spread, Defi Market Cap Tumbles

The 46-page report further explains how Lido’s bonded assets were affected by the Terra blowout and the demise of the crypto hedge fund Three Arrows Capital (3AC). One specific chart shared in the study shows how 3AC’s financial issues affected at least 12 different crypto companies directly or indirectly.

Decentralized finance (defi) was also hit, as Coingecko’s authors say “Due to third-order effects, defi protocols such as Maple Finance were not spared as some users’ funds were lent to Orthogonal Trading, which in turn had gone to Babel Finance, one of 3AC’s creditors.”

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Defi itself suffered a lot and Coingecko’s data shows that the defi market cap slid from “$142 billion to $36 billion in a span of 3 months.” The report again says that much of the value in defi was “wiped out largely due to the collapse of Terra and its stablecoin, UST.”

Coingecko’s study covers a wide variety of subjects that pertain to Q2 2022’s crypto action and touches on topics like other stablecoins losing their peg, decentralized exchange (dex) trade volumes, non-fungible tokens (NFTs), and NFT marketplaces. While the second quarter saw a lot of action, Coingecko’s report highlights how most of it has been bearish and gloomy.

Tags in this story

2022, 3AC, Babel Finance, Celsius, CoinGecko, DeFi, DEX, Dex Platforms, Lido, Lido’s bonded assets, Maple Finance, nft, NFT Markets, NFTs, Orthogonal Trading, Q2, Q2 2022, Q2 report, Q2 Study, report, Stablecoins, STETH, study, Three Arrows Capital, UST, UST classic, USTC, voyager

What do you think about Coingecko’s report and the action recorded in the second quarter of 2022? Let us know what you think about this subject in the comments section below.

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Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,700 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Image Credits: Shutterstock, Pixabay, Wiki Commons, Coingecko

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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3AC

Three Arrows Capital liquidators control $40M of the fund’s assets

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Three Arrows Capital liquidators control $40M of the fund’s assets

Three Arrows Capital liquidators control $40M of the fund’s assets Oluwapelumi Adejumo · 2 hours ago · 1 min read

The liquidators said the fund’s assets consisted of bank accounts, cryptocurrencies, NFTs, and stakes in other firms. 

1 min read

Updated: July 22, 2022 at 8:00 pm

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Cover art/illustration via CryptoSlate

Three Arrows Capital (3AC) liquidators Teneo have gained control of assets worth $40 million belonging to the embattled hedge fund, Bloomberg News reported July 21.

The liquidators reportedly stated that the fund’s assets consisted of bank accounts, cryptocurrencies, NFTs, and stakes in other firms.

Bloomberg reported that Teneo representative Russell Crumpler declared on July 20 that 3AC founders Kyle Davies and Su Zhu were still in control of certain digital assets and bank accounts.

Crumpler reportedly stated that Teneo had contacted around 40 companies that 3AC might have invested in and about 30 crypto exchanges and banks.

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In a separate filing on July 8, the liquidators said that Zhu and Davies were uncooperative and that their location was unknown.

The hedge fund owes its creditors $2.8 billion.

3AC’s creditors’ list includes Genesis; bankrupt crypto lending firms Voyager Digital and Celsius Network; Algorand, CoinList, and others.

Meanwhile, Su Zhu and Kyle Davies’ wife also filed claims against the embattled hedge fund.

3AC founders in touch with liquidators

A new Bloomberg report revealed that the 3AC founders are en route to Dubai and have denied claims that they were uncooperative.

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According to Bloomberg, the “death threats” they had received forced them into hiding; however, they have still maintained communication with the liquidator.

Zhu reportedly said the firm had positioned itself for a market that didn’t eventually happen, a view also shared by his cofounder Davies who said:

“We had all of our, almost all of our assets in there. And then in the good times we did the best. And then in the bad times we lost the most.”

The co-founders also acknowledged that Terra’s implosion was part of the reason it failed. According to Zhu, they probably allowed their relationship with Do Kwon to cloud their judgment of the token.

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