Three Arrows Capital (3AC)

Basics

• Singapore based (21-10-2020).
• Founded in 2012. Filed for bankruptcy on 2-7-2022.
• In a short thread about VCs and dumping, this fund was a fast dumper (4-6-2022):

"While they didn't do it in minutes, they dumped [their unlocked tokens] in a day, also sending to binance."

History

• For a good write up on why and how 3AC, an arb trader, got rekt so hard can be read here (7-7-2022).
• From Decrypt (2-7-2022):

"Crypto investment firm Three Arrows Capital, also known as 3AC, filed for Chapter 15 Bankruptcy Friday, Bloomberg has reported. While not unexpected, the news brings an ignominious end to the prominent, decade-old firm that managed as much as $10 billion in assets as recently as March, according to blockchain analytics platform Nansen.

The filing emerged hours after Voyager Digital suspended trading and withdrawals, citing unpaid loans to Three Arrows totalling $646 million. Voyager issued Three Arrows a notice of default on Monday.

The firm lost roughly $200 million when UST destabilized and plunged in value in May. BitMEX, FTX, and Deribit have since liquidated 3AC’s positions."

• From Bitcoin.com (23-6-2022):

"Voyager is owed 15,250 BTC and 350 million USDC, according to the company. Management said it originally asked for $25 million worth of USDC to be paid by June 24, but now it wants the entire balance of USDC and BTC by June 27. The news seemingly did not sit so well with Voyager investors as the company’s shares dropped 53% in value during a 24-hour period. "

Creditors

• From a legal report (19-7-2022):

"According to the documents obtained by The Block, which are no longer available online, 3AC owes 27 companies roughly $3.5 billion. Notably, Genesis Asia Pacific Pte Ltd., a subsidiary of Digital Currency Group, is the largest creditor listed, having loaned $2.3 billion to 3AC. Other large creditors looking to see their funds returned through the legal process include Celsius Network, CoinList, and FalconX, which each lent between $35 million to $75 million in tokens to 3AC. (Interestingly, creditors also include 3AC co-founder Zhu Su, who is asking for $5 million, and Chen Kelly, the wife of 3AC co-founder Kyle Davies, who is seeking $65 million.)

Based on another report from The Block, it appears that some of these larger creditors are banding together to form a committee, including Digital Currency Group, Voyager, CoinList, Blockchain.com, and Matrixport as members."

Investments

• Aave. Helped (15-7-2020) raise $3M for Aave.
• Aptos; took part in their $200m strategic round (15-3-2022).
• Avalanche; Polychain and Three Arrows lead $230m investment in Avalanche (17-9-2021).
• Axie Infinity; according to Decrypt (2-7-2022.
• Balancer; part of a $12M funding round (2-2021).
• Bastion; part of the $9M Series A raise, announced on the same day as its token got launched (21-4-2022).
• Bitcoin. Bought (4-1-2021) shares within the Bitcoin Trust of Grayscale: "The fund now owns nearly 38.9M shares, representing more than $1.31 billion in value."
• Bonfida; participated in a $4.5M seed round (15-10-2020).
• DerivaDEX. Is one of the backers in a $2.7M raise for DerivaDEX (2-7-2020).
• dHedge; one of the investors according to their blog (2-11-2020).
• DODO. Participated in a $5M raise for DODO (15-10-2020).
• dYdX; participated in the Series B round of $10M (26-1-2021).
• ETH; reportedly bought $400 million worth of ether 8-12-2021, this came just after Zhu has been highly critical of Ethereum. From CoinDesk: "The move is especially notable given Zhu’s recent disavowal of Ethereum, claiming “zero newcomers can afford the chain” because of its high transaction fees. Zhu said in a Telegram chat with CoinDesk that the hedge fund is bullish on ETH because the macro environment has become calmer and that “both U.S. and Chinese stock markets are healthy.”
• Gitcoin. Is one of the funders (18-10-2020) of Gitcoin Grant round 7 (and possibly continues to do so).
• KeeperDAO. Led a "seven-figure" seed round for KeeperDAO (31-7-2020).
• Mina. Helped raise $10.9M for Mina (21-10-2020). Led a $92M raise on 17-3-2022.

• mStable; turned out to have a backdoor deal on tokens. From a Prime Rating report (7-2022):

"In July 2020 community observed that some MTA tokens were unlocked unexpectedly and without announcement. Co-founder James Simpson admitted that the protocol team wasn't communicating clearly to the community about the deal and vesting schedule with a group of investors (DeFiance Capital, DACM, and Three Arrows Capital). Simpson explained the situation in this article."

• Nerve Finance; part of a $2M token OTC (12-4-2021).
• Perpetual Protocol; part of a $1.8M private sale (8-2020).
• Solana; according to Decrypt (2-7-2022.
• StarkWare; part of a $75M raise (24-3-2021). Took part in the Series C raise of $50m (17-11-2021).
• SushiSwap; one of the biggest LPs, besides Alameda (30-10-2020).
• Switcheo raised $1.2M from them, among others (5-11-2020).
• Synthetix. Is an institutional liquidity provider in Synthetix (23-7-2020).
• Tranchess; part of the $1.5m seed round (5-7-2021).
• Worldcoin; one of the many VCs who participated in this controversial project (24-10-2021).
• Yearn. Purportedly purchased 133 YFI (2-11-2020).

Team

• Su Zhu; CEO
• Kyle Davies
• Is a member of CDA (8-7-2020).