As Digital Currency Group (DCG) fuels rumors about its creditworthiness, Zhu Su, the co-founder of defunct Three Arrows Capital (3AC) fund, accuses the company of orchestrating Terra’s downfall alongside FTX. Whatever the truth behind this story, the crypto community has been quick to remind Zhu Su of his own mismanagement.
Did Digital Currency Group and FTX cause the downfall of Terra?
It’s no secret that following the cryptocurrency ecosystem closely, the crashes of Terra and FTX have taken many companies and other projects with them. Among those who did not survive the year 2022, there is the investment fund Three Arrows Capital (3AC), whose one of its co-founders, Zhu Su, accused FTX and Digital Currency Group (DCG) of orchestrating Terra’s downfallbut also for trying to destabilize the stETH:
Here’s rough summary of dcg situation
1) they conspired w FTX to attack Luna and steth and made a fair bit doing so
2) they took substantial losses in the summer from our bankruptcy as well as Babel, and other firms involved in gbtc
3) they could’ve calmly restructured then
— Zhu Su 🔺 (@zhusu) January 3, 2023
While it is not for us to judge whether or not these accusations are well-founded, Zhu Su’s exit occurs in millimeter timing. Indeed, Cameron Winklevoss rightly accused Barry Silbert, the CEO of DCG, of slowing down the reimbursement of the 900 million dollars that Genesis, which is a subsidiary of DCG, owes to Gemini.
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Zhu Su believes that DCG and FTX mishandled their losses
After Terra’s fall, GBTC’s peg issues, and his own fund’s bankruptcy, Zhu Su believes that FTX and Digital Currency Group did not over manage the losses that this had caused in their cash flow.
He does not hesitate to compare this situation to a child 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 left pocket right pocket callable promissory note that magically filled the hole. This is like a kid losing at poker and saying “I am fine, my dad will pay you, let me keep playing,” but if your dad is actually yourself
— Zhu Su 🔺 (@zhusu) January 3, 2023
Regardless of the veracity of these accusations and the links between all the people and entities named, the crypto community has been quick to remind Zhu Su that his own position was likely to taint the relevance of these remarks.
Following his thread, several people actually commented about mistakes made by Zhu Suwhich led to the bankruptcy of Three Arrows Capital, as his “supercycle theory”, while others advised him to manage his own litigation as a priority:
How about you pay your creditors first before talking about others
— Dr. Stephen Andrews (@Stephen_Andr41) January 3, 2023
If it is not possible to establish the end of this story to date, it is certain that the many commercial links that existed were these different companies have accentuated this phenomenon of chain bankruptciesand that this could lead to the downfall of other actors in turn.
👉 Also in the news – Bahamian authorities hold $3.5 billion from FTX
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I timidly discovered the world of blockchain at the end of 2018 during my quest for financial freedom. Initially invested moderately, it was only two years later that I took the gamble of betting everything on the movement that was taking shape then. I then dedicate 2021 to training myself better to acquire more knowledge and seriousness. As I often like to say: I still have a billion things to learn. And what I do know, I want to share with you.
Vincent Mayor
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