This week Three Arrows Capital (3AC) filed for bankruptcy, and as a result of those filings we have discovered more about their holdings. First off, from filings that have been released due to a forced liquidation from a judge, we now know that Three Arrows Capital had roughly $10B under management at one point, according to a court document filed in the British Virgin Islands. This supports estimates that they peaked around $15B with the market high in 2021.
The judge overseeing that liquidation on behalf of Deribit also ordered that all assets be moved to stablecoins, even though the loan was initially denominated in Bitcoin. When crypto lending firms don’t want their holdings in Bitcoin, it reveals a lot about market sentiment.
Documents also revealed that Three Arrows Capital co-founder Su Zhu and Kelly Kaili Chen, the wife of 3AC co-founder Kyle Davies, are listed as creditors to 3AC, though the amounts are not yet clear. This means that they will also be paid out during the liquidation process, even though they are ultimately responsible for the losses.
Most recently, Three Arrows Capital has filed for bankruptcy, and in that process it was revealed that both of the co-founders, Su Zhu and Kyle Davies, have fled Singapore and their locations are unknown. It is not illegal to make bad investments, so the pair likely had other reasons to believe they were in trouble worth fleeing from.
As of April 2022, 3AC had $3B under management.