3AC Co-Founder Zhu Su Criticizes FTX, Alameda Of Crypto Market Manipulation

Three Arrows Capital’s co-founder Zhu Su on Tuesday criticized FTX and Alameda Research for using lenders’ money to bailout them out. Zhu Su also pointed out that Sam Bankman-Fried and BlockFi accused Three Arrows Capital of “double pledging collateral” and manipulated the crypto market by making customers wire transfers to FTX through trading firm Alameda Research.

Three Arrows Capital Co-Founder Blasts FTX and Alameda

Three Arrows Capital co-founder Zhu Su in a series of tweets on November 29 blasted FTX and Alameda for manipulating the crypto market. FTX and Alameda have reportedly borrowed funds from crypto lenders including BlockFi and Voyager to actually bailout them.

“What is the intent behind getting a “bailout” from a firm that actually net borrows from you, in order to keep accepting client deposits for four more months?”

Zhu Su pointed out that FTX and BlockFi used third-tier media to accuse Three Arrows Capital of “double pledging collateral” following the bankruptcy filing by Three Arrows Capital in July. He attacked FTX and Alameda again after BlockFi filed for Chapter 11 bankruptcy.

Moreover, BlockFi is a creditor of FTX that lend money to Alameda. Then, Alameda lend money to Emergent, which is SBF’s personal holding company that purchased Robinhood shares. On November 9, Robinhood shares were pledged by Emergent as collateral to guarantee BlockFi’s FTX loan, which was used for bailing out BlockFi.

Zhu Su also claimed that the same manipulation was seen during the Voyager auction in July. Alameda could not even repay their own loan to Voyager. “They bailed out their own lenders with the same money that those lenders lent to them.”

How Banks Played Part in the Manipulation

Banks were reluctant to work with crypto companies including FTX. Sam Bankman-Fried arranged access to regulated banks through Alameda Research.

Customers were instructed to send wire transfers through Alameda accounts at Silvergate Capital, Signature Bank, Trust Bank, and others. In fact, SBF revealed that customers wired $8 billion to Alameda. It led to poor record-keeping and management at FTX.

Varinder is a Technical Writer and Editor, Technology Enthusiast, and Analytical Thinker. Fascinated by Disruptive Technologies, he has shared his knowledge about Blockchain, Cryptocurrencies, Artificial Intelligence, and the Internet of Things. He has been associated with the blockchain and cryptocurrency industry for a substantial period and is currently covering all the latest updates and developments in the crypto industry.

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