Three Arrows Capital (3AC) just wiped out its investment capital of nearly $3 Billions in months. The cause of the collapse like through high leverage decentralized finance (DeFi) and high debt ratios. 

Let's explore why 3AC instantly collapses.

Founders

Su Zhu and Kyle Davies are the founders of 3AC. The company was founded in 2012 to provide superior risk-adjusted returns. Ironically, the risk did not adjust properly, and the company went out of business instantly.

Investment Strategy

We do not know how 3AC invest their funds, but we do know they invested in:

Yacht:

https://twitter.com/unusual_whales/status/1549068269956411393

Own houses:

https://twitter.com/JackNiewold/status/1549153907921850373

How to Run a Crypto VC like a Criminal

https://twitter.com/JackNiewold/status/1549152912986853377

Step 1: run

Step 2: sue your own company

Step 3: aks your spouse to join the lawsuit

Bankruptcy Document

Thanks to the internet and the transparency of the Singapore law, you can learn a lot from the court document on what happened on 3AC.

https://twitter.com/rektdiomedes/status/1549174615452180480

Some breakdown of the investment portfolio:

Genesis - $2.3B

Rest of the 24 companies - $1.2B

Founders on the run while suing their own company. 

https://twitter.com/coinbureau/status/1549261248553840641

Where is My Money

Try to ask where is my money:

https://twitter.com/FreddieRaynolds/status/1549099292710895622

https://twitter.com/zhusu/status/1546801270014758912

Many companies invest in 3AC forces to liquidate. DRB Panama is one of them.

https://twitter.com/DeribitExchange/status/1537458993781669891

Where are the Founders

Founders ran away while filing to sue their own company.

https://twitter.com/Cryptofung/status/1546476266508980224

And they enjoy their private jet on investors' cash

https://twitter.com/0xBender/status/1549464116045041664

Anyone who Touches 3AC is Cursed

https://twitter.com/ViktorBunin/status/1549761977479843849

Coinbase just announced they did not have invested 3AC.

True Degen

3AC brings all true Degen together to blow up:

https://twitter.com/wassielawyer/status/1549094403062779905

https://twitter.com/FatManTerra/status/1549066466565169157

https://twitter.com/adamscochran/status/1546477191420170240

And what is up with Kelly Chen?

https://twitter.com/Stephen_Andr41/status/1549151972171063296

More to Come

https://twitter.com/HukAleksandra/status/1547546120175370241

Buy me a coffee here if you want to support my writing.

Photo by Ricardo Arce on Unsplash