THE MESS THEY LEFT BEHIND.
More insights into the Three Arrows Capital emerge, Do Kwon finally speaks out.
While the details are still flaming-hot, I, the Crypto Owl, am about to pack them nice and clean and deliver them to each of your email doorsteps. Let’s do this.
On Today’s Menu:
🍜 PHO: Do Kwon Speaks
🍝 CARPACCIO: The Unnoticed Red Flags Of The Three Arrows Capital
🥤 GATORADE: Crypto News video series
🍫 CHOCOLATE CRUMB CAKE: Top crypto news
Do Kwon Says His Piece
As promised yesterday, the full interview with the infamous ‘king of stablecoins’ Do Kwon is out. Yesterday, having presented the dubious circumstances about who, when and how to prepare and upload the interview, we can get straight into the gist of it today. So, with no more further ado, here are the key takeaways from the interview with the most notorious crypto personality of the year:
Do Kwon says authorities in South Korea haven’t filed charges against him or been in touch.
After being asked if he’s planning to return to South Korea, Do Kwon responds: “It’s kind of hard to make that decision because we’ve never been in touch with the investigators.” Well, we can only wonder whether he would plan on returning to South Korea if the investigators got in touch with him. After all, he faces allegations of fraud back there.
Do Kwon says he “plans to cooperate when the time comes”.
Pondering personal responsibility, he says, “I’ve never thought about what could happen to me if this fails.”
But, he doesn’t avoid it and admits that “I, and I alone, am responsible for any weaknesses that could have been presented for a short seller to start to take profit.”
Do Kwon suspects there was a Terra insider who was responsible for the crucial blow that took down Terra.
Do Kwon denies Terra to have been a Ponzi scheme.
You can watch the whole thing right here.
Despite being almost 30-minutes long, the interview was accused of being a marketing ploy attempting to redeem Do Kwon’s public image. And it doesn’t take long to tell that the community hasn’t been satisfied with the answers he gave.
One of the top-voted comments says: “Love how he dodged the question about how much he has since the luna crash”. This implies that, after all, Luna may have been an elaborate scheme at making Do Kwon very, very rich.
So, he may have denied the allegations of Terra Luna being a Ponzi scheme… But in reality, the narrative may change very quickly.
Three Arrow Capital (Evil?) Masterminds
Three Arrows Capital was an already established, prominent household name in the crypto hedge business. Everything went well… Until it didn’t anymore, and, as you know, in July 2022, Three Arrows Capital fell into liquidation as the judge froze their assets.
And the shipwreck that Three Arrows Capital caused echoed throughout the crypto market, with many observers claiming that they’re one of the most critical factors that caused the crypto crash of 2022.
And to speedrun through what they’ve caused… is getting everyone to trust them with their money… and then… don’t pay it back and disappear. It’s estimated that in July, creditors approached with almost $3 billion in claims. And now… All that money is gone. Oopsie.
But… Nothing’s that simple. And now, with everything being post-factum, many red flags from 3AC have been spotted retrospectively. And to understand the whole situation better, a deeper look into 3AC’s co-founders is required.
Currently, the 35-year-old Su Zhu and Kyle Davies, the two co-founders, are suspected of hiding. And, when you look back, some nothing-good-promising details can capture your eye.
For example, this quote from a former trader who knew them: “They used to boast that they can borrow as much money as they want…This was all planned, man, from the way they established credibility to the way the fund was structured.”
FIRST RED FLAGS
Several investors recall noticing that something was off as early as 2019. Back then, 3AC invested in a crypto options exchange called Deribit. After having done that, they set out to sell off a stake, and they put a value on it of $700 million.
Other investors inspected this offer… And realized that its actual value was $280 million. After this, 3AC's reputation was not like before. And, as you can see, for a reason.
Despite that, 3AC continued to boom. Founders' Twitter accounts gained more and more followers, just as the number of assets the firm managed. It still was the honeymoon era.
But another red flag emerged at that time. It was not from the outsiders… but from the insiders. 3AC’s employees. The company was known for a high staff turnover. And this can never be a good sign.
As ex-employees recall, they were never complimented for the excellent job they did but were constantly insulted after failing. Doesn’t sound fair. And… Tells a lot about the figures in power. Oh, and what’s even more: the staff complained about long hours, but the bosses didn’t consider hiring new people. The reason? They were worried that new people would leak trade secrets.
Well, we all know those “secrets'' today. Apart from that, the fact that one year ago, 3AC had two of their minority partners retiring at the same time was also a signal that probably could have been informative for those who were listening.
They worked between 80 to 100 hours a week and managed most of the firm’s operations. And they both retired simultaneously.
And… As a cherry on the top goes the fact that in February of 2022, 3AC founders invested $200 million in… Luna. And… They knew what it was. They knew Luna, just as they knew Do Kwon. You see, they hung out together in Singapore.
SOME GREAT NEWS
As always, the crypto sphere is buzzing from everything happening all over the place, all at once. So today, we can proudly present yet another video of ours, a video that marks yet another beginning - the beginning of the Crypto News video series.
We are very glad to have so many of you reading our newsletter, but the thing is, not everyone’s a fan of reading. Or reading newsletters. So, in that case, video format comes in handy.
We present to you our latest baby, so be sure to check it out, together with all the other stuff that we’ve accumulated on the channel to this day. And, as the saying goes, be sure to like, share and subscribe! This is how we grow.
MORE CRYPTO NEWS AROUND THE WEB
Brazil Brokerage Giant With 3.6m Clients Launches Btc And Eth Trading
Bitcoin Price Corrects After Hitting A Wall At A Multi-Month Descending Trendline
Crypto Custody Firm Bitgo To Sue Galaxy Digital For Abandoning $1.2b Merger Agreement
💜 HOW DID YOU LIKE THIS NEWSLETTER? 💜
Disclaimer: This newsletter is strictly educational. None of this information is intended to be financial advice. Always do your research and act responsibly with your profits.