Su Zhu accuses 3AC liquidators of ‘baiting’, hints at StarkWare token


Key points to remember

  • Three Arrows Capital’s Su Zhu has broken his silence for the first time in four weeks as his company battles its insolvency crisis.
  • Zhu shared an exchange of emails claiming his business had suffered “baiting” from liquidators after talks he agreed to were later used in court filings.
  • The email exchange accuses 3AC’s liquidators of agreeing to exercise a StarkWare token offer and then pulling out without warning.

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Zhu took to Twitter to share an email exchange claiming anonymous liquidators had entrapped 3AC in discussions and had not exercised a StarkWare token option they had pledged to accept.

Su Zhu breaks silence on 3AC crisis

Su Zhu has shared an update on the Three Arrows Capital saga.

In a tweet from tuesday, Zhu said his struggling crypto hedge fund, popularly known as 3AC, was baited by anonymous liquidators. Zhu shared screenshots of two emails from 3AC’s legal team, Advocatus Law LLP, saying liquidators brought the firm into “without prejudice” discussions to gather evidence for court filings. courts. The memo added that 3AC had a “willingness to work reasonably” with the liquidators to repay its obligations. He also said the 3AC families had received threats over the company’s recent collapse and had been contacted by Singapore’s central bank and would seek “appropriate punishment” for the alleged baiting. An excerpt read:

“Please let us know if you stated in your court documents that we explained that our clients and their families received threats of physical abuse and had to conduct inquiries with the Monetary Authority of Singapore over the past week , which meant that they worked under a lot of time pressure. In this regard, please send us copies of the court documents immediately. Since your documents appear to have already been released to the media, we hope that you will have no problem providing us with these documents.”

Is StarkWare launching a token?

The second email shared by Zhu accused the liquidators of agreeing to exercise a StarkWare token offer by July 5 and then reneging on the offer without warning, hitting their creditors with losses. “Our clients believe that your failure to exercise the Company’s rights to exercise StarkWare has caused the Company to lose substantial value,” the note read. 3AC led the investments in StarkWare and Zhu is one of its creditors. The company raised $100 million in a Series D funding round this year, reaching a valuation of $8 billion. It has long been speculated that StarkWare would follow other Ethereum Layer 2 projects by releasing its own token, in part because it received funding from companies like 3AC, although the rumors have never been confirmed. However, the email exchange shared by Zhu indicates that a token could be on the horizon. Crypto Briefing contacted a StarkWare representative for comment, but received no confirmation or denial.

Until recently, 3AC was known as one of the largest crypto hedge funds holding billions of dollars in assets under management. However, it suffered a dramatic implosion in June when the crypto market crashed, dragging other giants with it as it was revealed that the company had taken leverage from creditors and had no failed to meet a series of margin calls. Although the exact figure is unknown, the company owes over $1 billion to Voyager Digital, Genesis Trading and other lenders. 3AC has since filed for Chapter 15 bankruptcy, and the whereabouts of Zhu and co-founder Kyle Davies are unknown. While it was unclear to which liquidator the Advocatus Law LLP emails were directed, Voyager issued a notice of default to 3AC last month amid the crisis. 3AC owes the company $665 million.

Disclosure: At the time of writing this article, the author of this article owned ETH and several other cryptocurrencies.

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