After five long weeks, the disgraced Three Arrows Capital-3AC founders have finally come out of hiding. In an interview with Bloomberg, Su Zhu and Kyle Davies cited numerous death threats as their reason for going underground.

“For Kyle and I, there’s so many crazy people in crypto that kind of made death threats or all this kind of noise,” Zhu said. “We feel that it’s just the interest for everyone if we can be physically secured and keep a low profile.”

We have extensively covered some of the reasons 3AC imploded. The founders have now come out and confirmed that their significant exposure to Luna, stETH and GBTC were the final nails in the 3AC coffin.

Luna is the algorithmic stablecoin that spectacularly entered into a death spiral in late April leading to the onset of this crypto winter. 3AC had significant exposure to Luna and the founders claim that their personal friendship with Do Kwon caused the pair to miss red flags about the stability of the project.

“We began to know Do Kwon on a personal basis as he moved to Singapore…If we could have seen that, you know, that this (Luna) was…attackable in some ways, and that it had grown…too big, too fast.”

3AC also had exposure to stETH which is the tokenized version of staked Ethereum that should trade at a 1:1 parity to ETH via Lido Finance. 3AC lost a significant portion of its investment as stETH became depegged from ETH during the market downturn.

“Because Luna just happened, it, it was very much a contagion where people were like, OK, are there people who are also leveraged long staked Ether versus Ether who will get liquidated as the market goes down?…So the whole industry kind of effectively hunted these positions,”

For some time, Grayscale Bitcoin Trust — GBTC was one of the few US-regulated crypto products allowing institutions to have exposure to bitcoin. This allowed GBTC to trade at a premium and 3AC made a killing off this arbitrage opportunity. During the market downturn, GBTC eventually slipped from a premium to a discount, and the arbitrage opportunity that made 3AC so rich no longer worked.

“We managed to do it at the right window when it was a very big profit…and then like others copied us into that trade later on and then lost not just the money, but also went into negative. Because everyone did it, then the trust went to discount and then it went to a far bigger discount than anyone thought possible.”

Speaking from an undisclosed location, the founders now plan to move their operation to Dubai with hopes to redeem their reputation.

“Given that we had planned to move the business to Dubai, we have to go there soon to assess whether we move there as originally planned or if the future holds something different for us,”

Considering how badly Su Zhu and Kyle Davies have hurt the crypto industry due to their reckless investments, it remains to be seen if the pair will ever be trusted by the Web 3 community again.

After five long weeks, the disgraced Three Arrows Capital-3AC founders have finally come out of hiding. In an interview with Bloomberg, Su Zhu and Kyle Davies cited numerous death threats as their reason for going underground.

“For Kyle and I, there’s so many crazy people in crypto that kind of made death threats or all this kind of noise,” Zhu said. “We feel that it’s just the interest for everyone if we can be physically secured and keep a low profile.”

We have extensively covered some of the reasons 3AC imploded. The founders have now come out and confirmed that their significant exposure to Luna, stETH and GBTC were the final nails in the 3AC coffin.

Luna is the algorithmic stablecoin that spectacularly entered into a death spiral in late April leading to the onset of this crypto winter. 3AC had significant exposure to Luna and the founders claim that their personal friendship with Do Kwon caused the pair to miss red flags about the stability of the project.

“We began to know Do Kwon on a personal basis as he moved to Singapore…If we could have seen that, you know, that this (Luna) was…attackable in some ways, and that it had grown…too big, too fast.”

3AC also had exposure to stETH which is the tokenized version of staked Ethereum that should trade at a 1:1 parity to ETH via Lido Finance. 3AC lost a significant portion of its investment as stETH became depegged from ETH during the market downturn.

“Because Luna just happened, it, it was very much a contagion where people were like, OK, are there people who are also leveraged long staked Ether versus Ether who will get liquidated as the market goes down?…So the whole industry kind of effectively hunted these positions,”

For some time, Grayscale Bitcoin Trust — GBTC was one of the few US-regulated crypto products allowing institutions to have exposure to bitcoin. This allowed GBTC to trade at a premium and 3AC made a killing off this arbitrage opportunity. During the market downturn, GBTC eventually slipped from a premium to a discount, and the arbitrage opportunity that made 3AC so rich no longer worked.

“We managed to do it at the right window when it was a very big profit…and then like others copied us into that trade later on and then lost not just the money, but also went into negative. Because everyone did it, then the trust went to discount and then it went to a far bigger discount than anyone thought possible.”

Speaking from an undisclosed location, the founders now plan to move their operation to Dubai with hopes to redeem their reputation.

“Given that we had planned to move the business to Dubai, we have to go there soon to assess whether we move there as originally planned or if the future holds something different for us,”

Considering how badly Su Zhu and Kyle Davies have hurt the crypto industry due to their reckless investments, it remains to be seen if the pair will ever be trusted by the Web 3 community again.