Three Arrow Capital Saga: More Details Revealed

Three Arrow Capital is the name that Hollywood directors could keep in mind the next time they want to make a crypto film.

The troubled lender Three Arrow Capital (3AC) is still in the spotlight. The case has become more complicated since the firm’s bankruptcy, with 3AC’s cofounders Zhu Su and Kyle Davies disappearing.

New details of the case surfaced in the past 24 hours, with new parties revealed.

It Just Gets Better

Teneo Restructuring, 3AC’s designated liquidation unit, has published a 1,157-page affidavit submitted by creditors and drafted by liquidator Russell Crumpler.

The document says that 3AC is liable for $3.5 billion in claims. Among the creditors are Genesis Trading, Celsius, Voyager, CoinList, Galaxy Digital, SBI Crypto, BlockFi, and Moonbeam, among others.

Following the publication of the affidavit, the community believed that there were still more names tied to 3AC, such as BlockFi, Babel Finance, Deribit, DeFiance Capital, and Finblox.

The paper also included a claim from 3AC co-founder Zhu Su, as well as another from Kyle Davies’ wife. Zhu Shu filed a $5 million claim to the fund, while Davies’ wife filed a $65.7 million claim.

While these two claims are unintelligible, the one from Genesis Trading is noteworthy.

There Will be More Info Hitting Markets

Teneo’s declaration stated that Genesis Trading lent 3AC $2.3 billion. Genesis is a unit of Digital Currency Group. However, it appears that the debt is not adequately collateralized.

According to previous estimates, Genesis fears a nine-figure loss as a result of its tight relations to 3AC. However, it appears that the actual amount of the loan is unclear.

Genesis managed to recover part of the loan by starting a lawsuit against 3AC through the American Arbitration Association (AAA) in New York last month. Genesis stated in a letter to AAA on June 15 that 3AC violated two loan agreements inked in January 2019 and January 2020.

In a series of tweets, Genesis CEO Michael Moro stated that the company’s loans to 3AC had weighted average margin requirements of 80%, which 3AC was unable to meet, forcing Genesis to sell the collateral.

He also stated that Digital Currency Group has assumed certain Genesis liabilities in order to maintain and expand its operations in the future.

Genesis continues to operate as usual while DCG now faces probable losses as a result of 3AC’s financing.

Crumpler has requested access to 3AC’s office. If approved, it will give liquidators some way to freeze the company assets through cold wallets and other information regarding the company’s trading accounts.

To wit,

“To prevent these from being removed, destroyed, damaged or modified (by Su Zhu, Kyle Davies or any other person with access), it is imperative that the Liquidators be granted immediate access.”

Digital Currency Group, Voyager Digital, Blockchain Access Matrix Port Technologies, and CoinList Lend are the companies that have suffered the most as a result of the 3AC case.

These companies have also come together to form a committee that will advocate their interests.

The Tide is OUT!

The collapse of Do Kwon’s notorious Terra blockchain was the first domino in a chain reaction that has resulted in liquidations, bankruptcies, and other financial difficulties throughout the cryptocurrency sector.

3AC sustained a loss of around $200 million as a result of the de-peg of the UST. That led to the company’s bankruptcy filing in the New York court. Additionally, 3AC was also requested to liquidate its assets in the British Virgin Islands, which is where Three Arrows Capital is registered.

Amid the crisis, the co-founders of the company, Zhu Su and Kyle Davies, were accused of being uncooperative due to the fact that they were unable to be located and their frequent disappearances.