New York Magazine pins 3AC collapse on reckless management

More evidence has surfaced that Three Arrows Capital (3AC) did not take precautions when investing, leading to its collapse.

A report by New York Magazine, which investigated the collapse of the lender, has claimed co-founders Kyle Davies and Su Zhu faced overwhelming criticism for their high-handed way of running the fund which had serious and broader impact on the cryptocurrency market.

According to the New York Magazine, 3AC was making a profit of only a cent on each dollar that it managed to trade.

The Singapore-based fund was criticized for running into two many risky ventures which led to its financial demise and the eventual slump of the cryptocurrency market.

“We FX traders are partly to blame for this because we knew for a fact that these guys were not able to make money in FX”, a former trader told the publication.

“Everyone thought they were geniuses”, the source said. 3AC’s success in FX would not follow the company in cryptocurrency, it seems, with the fund beginning to crack.

The 3AC co-founders did boast an impressive $2bn investment in Grayscale Bitcoin Trust (GBTC), sending a message of reassurance to investors and consumers. However, the New York Magazine found evidence that Davies knew the value of GBTC would fall.

But the true undoing of 3AC came when the fund moved aggressively on Terra, a sister coin to Luna.

The crash that followed wiped off the fund and along with it, a huge chunk of the entire cryptocurrency market.

The co-founders maintained that they were “crypto believers” despite the fact that 3AC’s valuation went from $500m to just $604, practically nothing.

With 3AC filing for bankruptcy and depleted of funds, this may serve as a warning sign to investors, consumers and regulators. The estimated losses of 3AC in terms of real investor money amounts to $200m.

If you wish to stay away from risky cryptocurrency ventures you can always use crypto recreationally at Bitcasino, 1xBit or FortuneJack.

Looking for your next crypto casino? Check out: Bitcasino, or FortuneJack.

Written by Alex


Alex is a well-rounded crypto writer who focuses on general market and legal developments. His main interest lies in how crypto gaming can become a more permanent part of the gaming landscape and how blockchain holds benefits to players they are not even aware of.

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