Three Arrows Capital (3AC) just wiped out its investment capital of nearly $3 Billions in months. The cause of the collapse like through high leverage decentralized finance (DeFi) and high debt ratios. 


Let's explore why 3AC instantly collapses.


Founders

Su Zhu and Kyle Davies are the founders of 3AC. The company was founded in 2012 to provide superior risk-adjusted returns. Ironically, the risk did not adjust properly, and the company went out of business instantly.


Investment Strategy

We do not know how 3AC invest their funds, but we do know they invested in:


Yacht:

https://twitter.com/unusual_whales/status/1549068269956411393


Own houses:

https://twitter.com/JackNiewold/status/1549153907921850373


How to Run a Crypto VC like a Criminal


https://twitter.com/JackNiewold/status/1549152912986853377


Step 1: run

Step 2: sue your own company

Step 3: aks your spouse to join the lawsuit


Bankruptcy Document

Thanks to the internet and the transparency of the Singapore law, you can learn a lot from the court document on what happened on 3AC.


https://twitter.com/rektdiomedes/status/1549174615452180480


Some breakdown of the investment portfolio:


Genesis - $2.3B

Rest of the 24 companies - $1.2B


Founders on the run while suing their own company. 


https://twitter.com/coinbureau/status/1549261248553840641

Where is My Money


Try to ask where is my money:


https://twitter.com/FreddieRaynolds/status/1549099292710895622


https://twitter.com/zhusu/status/1546801270014758912


Many companies invest in 3AC forces to liquidate. DRB Panama is one of them.


https://twitter.com/DeribitExchange/status/1537458993781669891


Where are the Founders

Founders ran away while filing to sue their own company.

https://twitter.com/Cryptofung/status/1546476266508980224


And they enjoy their private jet on investors' cash

https://twitter.com/0xBender/status/1549464116045041664


Anyone who Touches 3AC is Cursed


https://twitter.com/ViktorBunin/status/1549761977479843849


Coinbase just announced they did not have invested 3AC.


True Degen

3AC brings all true Degen together to blow up:


https://twitter.com/wassielawyer/status/1549094403062779905


https://twitter.com/FatManTerra/status/1549066466565169157


https://twitter.com/adamscochran/status/1546477191420170240


And what is up with Kelly Chen?


https://twitter.com/Stephen_Andr41/status/1549151972171063296


More to Come


https://twitter.com/HukAleksandra/status/1547546120175370241


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Photo by Ricardo Arce on Unsplash