As Digital Currency Group (DCG) fuels rumors about its creditworthiness, Zhu Su, the co-founder of defunct fund Three Arrows Capital (3AC), accuses the company of orchestrating Terra’s downfall alongside FTX. Whatever the truth behind this story, the crypto community was quick to remind Zhu Su of his mishandling.
Did Digital Currency Group and FTX cause the Earth to fall?
It is no secret that closely following the cryptocurrency ecosystem, the Terra and FTX crashes brought many companies and other projects with them. Among those who did not survive the year 2022 is the investment fund Three Arrows Capital (3AC), of which one of its co-founders, Zhu Su, accused FTX and Digital Currency Group (DCG) of orchestrating Terra’s fallbut also for trying to destabilize stETH:
Here is a rough summary of the DCG situation
1) they conspired with FTX to attack Luna and steth and did quite a few things in that way
2) suffered substantial losses over the summer from our bankruptcy, Babel and other companies involved in the GBTC
3) then they could have easily restructured
— Zhu Su 🔺 (@zhusu) January 3, 2023
While it is not for us to judge whether or not these allegations are founded, Zhu Su’s exit takes place in millimeter times. Cameron Winklevoss, in fact, has rightly accused Barry Silbert, CEO of DCG, of slowing down the repayment of the 900 million dollars that Genesis, a subsidiary of DCG, owes to Gemini.
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Zhu Su believes DCG and FTX mismanaged their losses
After the fall of Terra, GBTC’s pegging problems and the bankruptcy of his fund, Zhu Su believes that FTX and Digital Currency Group did not over-manage the losses this had caused in their cash flow.
Don’t hesitate to compare this situation to a kid who loses at pokerbut who would tell the croupier that his father would be there to pay, when in reality no one can repay this debt:
4) instead they fabricated a promissory note callable left pocket right pocket which magically filled the hole. It’s like a kid who loses at poker and says “I’m fine, my dad will pay you, let me keep playing”, but if your dad is really you
— Zhu Su 🔺 (@zhusu) January 3, 2023
Regardless of the veracity of these allegations and the connections between all named individuals and entities, the crypto community was quick to remind Zhu Su that his very position risked tainting the relevance of these observations.
Following his thread, several people actually commented about the mistakes made by Zhu Suwhich led to the failure of Three Arrows Capital, as his “supercycle theory”, while others advised him to handle his own litigation as a priority:
How about paying your creditors before talking about the others
— Dr Stephen Andrews (@Stephen_Andr41) January 3, 2023
If to this day it is not possible to establish the end of this story, it is certain that the many commercial links that existed were these different companies have accentuated this phenomenon of chain failuresand that this could in turn lead to the downfall of other actors.
👉 Also in the news: Bahamian authorities hold $3.5 billion from FTX
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