Death threats, Dubai & Do Kwon; 3AC founders finally speak up

Sahana Kiran
Source – Unsplash

The entire globe has been witnessing the downfall of bankrupt crypto lenders. A trend ticked off by Three Arrows Capital or 3AC instilled immense distress among investors. A few more firms followed suit and filed for bankruptcy, sending shock waves across the market. In addition to the bankruptcy claims, missing executives further increased the magnitude of the anxiety. But the reason behind this was darker than expected. Kyle Davies and Su Zhu, the co-founders of 3AC, finally broke the silence and revealed why they were in hiding.

Death threats

Several weeks after radio silence, the founders of the insolvent firm, 3AC, decided to speak up finally. According to Bloomberg, the founders were present in a telephone interview from an undisclosed location. Following the platform’s downfall, claims about how the founders took out the money from 3AC began surfacing. Denying this, Zhu claimed to have poured his money into the platform.

“People may call us stupid. They may call us stupid or delusional. And, I’ll accept that. Maybe. But they’re gonna, you know, say that I absconded funds during the last period, where I actually put more of my personal money back in. That’s not true.”

Death threats, however, started pouring in. The 3AC co-founders were therefore compelled to disappear. Nevertheless, they claimed to be in contact with the relevant authorities.


Zhu and Davies disclosed that they would relocate to Dubai while keeping their current whereabouts a secret. The duo wants to remain unnoticed while being physically secure. Additionally, a focus continues to be the orderly disposal of their complicated book of private assets. The 3AC founder added,

“Given that we had planned to move the business to Dubai, we have to go there soon to assess whether we move there as originally planned or if the future holds something different for us. For now, things are very fluid and the main emphasis is on aiding the recovery process for creditors.”

It should be noted that Dubai has emerged as a hotspot for crypto projects.

Do Kwon

The founder of TerraForm Labs [TFL], Do Kwon is likely one of the most hated men in the crypto-verse. The downfall of Terra left the crypto community high and dry. Despite causing immense loss to many, Kwon lives as a free man with a brand new network called Terra 2.0. The co-founders of 3AC began getting close to Kwon after he moved to Singapore.

Like everyone else in the market, Zhu and Davies believed Terra was on its way to achieving big things. However, by the time they released, “it had grown too, you know, too big, too fast.” It ended up dropping down. Zhu said,

“What we failed to realize was that Luna was capable of falling to effective zero in a matter of days and that this would catalyze a credit squeeze across the industry that would put significant pressure on all of our illiquid positions.”

It seems like being a little “too close” to Kwon brought them no good. Zhu explained that the whole thing turned out to be an LTCM or a Long Term Capital Moment for them. Speaking about how the entire market hunted stakes Ether positions, Zhu added,

“Because Luna just happened, it, it was very much a contagion where people were like, OK, are there people who are also leveraged long staked Ether versus Ether who will get liquidated as the market goes down?”

3AC survived the Luna crash

It seems like the downfall of LUNA did not impact 3AC as much as Bitcoin’s plummet did. However, the firm had to borrow funds from major crypto lenders and investors. Zhu revealed that the firm’s leaders were “comfortable” even after the LUNA collapse. Things took a different turn following Bitcoin’s drop from $30K to a low of $20K.

Zhu added,

“So I just think that, you know, throughout that period, we continued to do business as usual. But then yeah, after that day, when, you know, Bitcoin went from $30,000 to $20,000, you know, that, that was extremely painful for us. And that was in, that ended up being kind of the nail in the coffin.”

3AC founders are not into a lavish lifestyle

Rumors about Zhu and Davies splurging on yachts and bungalows began surfacing the industry. The 3AC founders were called out for spending $50 million as a down payment for a luxury yacht, followed by a $48.8 million bungalow purchase in Singapore. Zhu, however, poured cold water on these tales.

He affirmed that the boat was purchased about a year ago. It was commissioned to be built and employed in Europe. He even revealed that he had only two houses in Singapore. Claiming that he biked to work every day, he added,

“We were never seen in any clubs spending lots of money. We were never seen, you know, kind of driving Ferraris and Lamborghinis around. This kind of smearing of us, I feel, is just from a classic playbook of, you know, when this stuff happens, when funds blow up, then you know, these are kind of the headlines that people like to play.”

Additionally, the liquidators of 3AC have managed to seize $40 million through cryptocurrencies, bank accounts, and NFTs. While this is just a tiny fraction of what they are owed, more clarity will likely follow suit.