Zhu Su, the co-founder of the cryptocurrency investment firm Three Arrows Capital has spoken out on social media as rumors swirl around the hedge fund’s impending insolvency.
What Happened: The 3AC co-founder tweeted, “We are in the process of communicating with relevant parties and fully committed to working this out.”
Zhu’s comments came even as cryptocurrency Twitter was abuzz with rumors that the Singapore-based hedge fund was going bust.
Three Arrows Capital (3AC) a $10 Billion leveraged crypto hedge fund owned by @KyleLDavies has vaporized.
— ZeroHedge (@govttrader) June 14, 2022
Poof...it's gone.
Three Arrows Capital, a prominent crypto hedge fund, is rumored to be insolvent
— Fintwit (@fintwit_news) June 15, 2022
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Why It Matters: 3AC sold $40 million of Lido’s staked Ether (stETH) early Tuesday, according to a report from cryptocurrency publication The Defiant, which cited blockchain data.
While stETH maintained a peg with ETH, that changed dramatically last week as the beleaguered Celsius (CEL) began to sell its holdings to facilitate withdrawals.
Three Arrows also suffered heavy losses due to its exposure to Terra Classic (LUNC), reported The Block.
In May, LUNC lost almost all of its value after the project-backed algorithmic stablecoin TerraClassic USD (USTC) lost its peg with the dollar.
Zhu is known to tweet about Ethereum ETH/USD alternatives such as Avalanche (AVX) and Solana (SOL). Recently, he labeled stETH as the “most sound source of native protocol yield on Ethereum.”
Most of the steth fair discount analysis ive seen misses that from an onchain functionality perspective, steth is nearly pari passu w eth functionality in defi
— Zhu Su (@zhusu) June 12, 2022
It is the most sound source of native protocol yield on Ethereum
This makes it an attractive part of an eth-denom port
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