This article briefly:
Three Arrows Capital co-founder Su Zhu criticized DCG and FTX on Twitter.
He accused them of conspiring to attack Luna and stETH.
Gemini co-founder Cameron Winklevoss also sent a critical open letter to DCG founder Barry Silbert.
Three Arrows Capital co-founder Su Zhu tweeted that DCG and FTX conspired to attack LUNA and stETH, and accused them of misleading them.
Su Zhu, co-founder of the bankrupt hedge fund Three Arrows Capital, went on a tirade on Twitter about the Terra collapse, with Zhu accusing Digital Currency Group and FTX of working together to attack Terra’s LUNA token and stETH, the latter of which left 3AC insolvent.
Zhu posted a Twitter thread on Jan. 3, saying DCG “conspired” with FTX “to attack Luna and stETH, and it was fair to do so.” He added that the company “made a left pocket right pocket redeemable promissory note that magically filled the hole.”
He also accused DCG and FTX of misleading and using various methods to attack hedge funds. Essentially, he claimed that DCG and FTX took advantage of 3AC’s collapse while insolvent to absorb more deposits in the hope that the market would rise.
Zhu also briefly mentioned the stETH depeg in his post. The incident caused the tokens provided by Lido to trade at a discount to the price of ETH, which raised concerns about the knock-on effects.
Winklevoss harshly criticizes DCG founder
DCG and its founder Barry Silbert have also been controversial for other reasons, with Gemini co-founder Cameron Winklevoss posting an open letter to Silbert on Twitter criticizing his tactics. The exchange, DCG and its parent company Genesis are working to resolve the issue of returning user funds.
Winklevoss said DCG was “engaging in malicious delay tactics.” He also noted that Silbert refused to “agree to a timeline with key milestones.”
Three Gemini users also filed a class-action arbitration request against Genesis and DCG in response to Gemini discontinuing its Earn program after Genesis froze withdrawals.
Silbert has responded to the letter, denying that there are any outstanding payments. He specifically stated that “DCG did not borrow $1.675 billion from Genesis.” He also claimed that DCG made a proposal on December 29th but received no response.
The Three Arrows Capital saga continues
The 3AC saga has undergone several updates over the past few months. A bankruptcy judge approved subpoenas against leadership, including co-founders Su Zhu and Kyle Davies. Meanwhile, liquidators have filed a $30 million claim for a superyacht.
Liquidators said the founders were uncooperative with the investigation. This, in turn, made it difficult to compensate creditors. They had said the two founders undermined recovery efforts.