Following the recent drama with the crypto hedge fund, one of the co-founders – Kyle Davies – said they are exploring different options, some of which include asset sales and getting rescued by another firm. Nevertheless, both Davies and Su Zhu remain believers in the crypto industry.
- Headquartered in Singapore, 3AC became one of the largest cryptocurrency-focused hedge funds in the past few years. However, the first signs of trouble emerged earlier this week when rumors started to circulate that it could face a massive liquidation in some of its positions.
- The situation took a turn for the worse a few days later when FT reported that 3AC failed to meet margin calls. BlockFi was among the lenders that had to liquidate some of the hedge fund’s positions.
- While initially the two founders, former classmates, remained relatively quiet, Davies opened up about the company’s dire situation in an interview with WSJ.
- He admitted that 3AC had suffered losses following last month’s collapse of Terraform Labs’ two native cryptocurrencies – the algorithmic stablecoin UST and LUNA. The hedge fund, along with others, participated in a $1 billion token sale event by Luna Foundation Guard and invested $200 million in LUNA as part of the deal.
“The Terra-Luna situation caught us very much off guard,” said Davies.
- The plummeting prices in the broader crypto market in the past week or so harmed the firm’s positions as well.
- This has pushed 3AC into looking for desperate options, including “asset sale and a rescue by another firm,” said Davies.
- Despite the ongoing crisis, the co-founder asserted that they have “always been believers in crypto, and we still are,” before adding:
“We were not the first to get hit. This has been all part of the same contagion that has affected many other firms.”
Binance Free $100 (Exclusive): Use this link to register and receive $100 free and 10% off fees on Binance Futures first month (terms).
PrimeXBT Special Offer: Use this link to register & enter POTATO50 code to receive up to $7,000 on your deposits.
The Bitcoin price rebounded off the low of its current range and retraced its weekend loss…