Three Arrows Capital had positioned itself for a market that "didn’t end up happening" and "the whole situation is regrettable," co-founders Zhu Su and Kyle Davies told Bloomberg in an interview published today — while also explaining that they're en route to Dubai.
“The whole situation is regrettable,” Davies told Bloomberg. “Many people lost a lot of money.”
Zhu added: “We positioned ourselves for a kind of market that didn’t end up happening.”
3AC had grown to manage billions of dollars as one of the highest profile hedge funds in crypto, before imploding following May's collapse of the Terra ecosystem and its related luna token. The fund filed for bankruptcy earlier this month. Court documents published on Monday by 3AC's liquidators — and later deleted — show that 3AC owed 27 crypto companies $3.5 billion.
The founders explained in the interview how bets on luna, the Grayscale Bitcoin Trust and staked ether all went sour.
“What we failed to realize was that luna was capable of falling to effective zero in a matter of days," Zhu said.
The pair declined to give their location but said they say were en route to Dubai, from where they hope to manage 3AC's liquidation.
“For Kyle and I, there’s so many crazy people in crypto that kind of made death threats or all this kind of noise,” Zhu said. “We feel that it’s just the interest for everyone if we can be physically secured and keep a low profile.”
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