"I suspect they might be 80 percent of the total original contagion," Sam Bankman-Fried, CEO of crypto exchange FTX, told, referring to Three Arrow's alleged responsibility for the broader market crash. "They weren't the only people who blew out, but they did it way bigger than anyone else did. And they had way more trust from the ecosystem prior to that.
Really, though, the pair's outward facing bravado appears to have been a complete front. They were borrowing massive amounts of money from new investors — including $66 million from Zhu's— in order to pay old debts, and in retrospect, it seems quite clear that they very much knew their operation was actually insolvent. Which, well, is basically just a"The numbers they were reporting in May were very, very wrong," Lane Kasselman, chief business officer of Blockchain.com, told.
Blockchain.com, notably, lost $270 million in unpaid loans to 3AC, and his since laid off about a quarter of its staff. Among other casualties were crypto exchange Voyager, which has since gone bankrupt andThe duo have also been accused of borrowing money from organized crime operations, which may really be why they're now in hiding. Eep!
So far, liquidators have only been able to recover a paltry $40 million of 3AC's onetime billions. Still, even if all of the money in its portfolio was somehow recovered, those billions would hardly be enough to reverse the colossally destructive game of dominos that the firm's eruption caused — perhaps proving, once and for all, that the crypto market is less Wild West and more house of cards.
"They used to boast that they can borrow as much money as they want," an unnamed trader who knew the pair in Singapore told. "This was all planned, man, from the way they established credibility to the way the fund was structured."'s request for comment, except for an automatic email reply from Davies that read "Please note I am out of office at this time."
yes clearly it's the dudes who breathed on the house of cards fault and not the inherently fragility of the structure itself
sad_trombone.mp3