The Three Arrows Capital crisis hits the fan with this new twist

ambcrypto.com:

The Three Arrows Capital crisis seems to have taken a new shift after latest developments. The Singapore-based hedge fund has been edging towards insolvency with massive liquidations. Co-founder Su Zhu’s tweet also indicated the ongoing struggles at the company.

Yesterday, Danny Yuan, CEO of Blocks Capital, posted $1 million was taken out of his firm’s accounts. Today, Danny posted a thread explaining where it all went wrong between 3AC and his firm. He begins with how the relationship with 3AC started in November 2020 when his firm started using their trading accounts. In his own words the agreement was as follows:

“We withdraw whenever we want. 100% of the PNL belongs to us. They are never to move our funds without permission (increases the risk of our positions getting liquidated) and in return, we pay them fees for their service.”

— Danny (@Danny8BC) June 16, 2022

The cause for deterioration happened on 14 June when Danny’s firm found out $1 million was missing from their accounts. Later, they were being repeatedly “ghosted” by 3AC co-founder Kyle Davies and the Ops team. Then, rumors started circulating about 3AC’s financial distress on social media. Based on his learning of the situation Danny hypothesized:

“What we learned is that they were leveraged long everywhere and were getting margin-called. Instead of answering the margin calls, they ghosted everyone. The platforms had no choice but to liquidate their positions, causing the markets to further dump.”

Danny concluded with a plea to freeze 3AC’s assets so that those owed can be paid back after legal proceedings. Despite the impending of huge crypto