3AC Founder Alleges FTX and DCG for Terra’s Collapse

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Key takeaways:

  • The creator of 3AC accused the Digital Currency Group of collaborating with FTX to target LUNA.
  • The 3AC founder said that DCG “magically filled the hole” instead of restructuring from losses brought on by the 3AC bankruptcy.

Three Arrows Capital (3AC) founder Su Zhu accused the Digital Currency Group (DCG) and FTX of having liquidity issues in a thread he posted on Twitter. The Bitcoin community, however, immediately criticized the inventor for placing blame and refusing to take ownership.

Zhu said in the forum that DCG was responsible for LUNA2 (LUNA), currently known as Luna Classic, collapsing (LUNC). Zhu asserted that the venture capital business and the FTX exchange planned an attack on LUNC with the intention of profiting from it.

The 3AC founder added that DCG “magically filled the vacuum” rather than reorganizing from losses brought on by the 3AC bankruptcy. Despite Zhu’s attempts to disparage DCG and FTX, the community thinks he must concentrate on his transgressions.

After Cameron Winklevoss, the creator of Gemini sent an open letter to Barry Silbert, the CEO of DCG, Zhu tweeted a few hours later. Winklevoss pressed Silbert to return the $900 million that Genesis, a DCG subsidiary, is believed to owe to Gemini‘s clients.

Genesis owes DCG $1.6 billion, and the founder of Gemini stated that Genesis should use this money to pay Gemini. Silbert countered that DCG never neglected to pay interest to Genesis.

In addition to Zhu, other well-known figures from the crypto world joined the discussion. Adam Back, the CEO of Blockstream, also mentioned a few potential contributing causes. Adam tweeted:

“one interesting open question is whether the 10 year maturity promissory note from DCG parent to genesis is callable. (callable meaning if the beneficiary – genesis – has rights to demand early repayment). that could be significant.”

As its founders may be based in Indonesia and the United Arab Emirates, where it may be challenging to implement court judgments, the 3AC bankruptcy process is currently facing challenges.

Lawyers for liquidators have said that despite agreeing on a communications protocol, the 3AC founders have not communicated with liquidators in recent months.

The legal team for the liquidators criticized the 3AC founders on December 2 for speaking to the press and being active on social media while ignoring them.

The legal team asserted that the founders regularly switched between several jurisdictions and only had brief conversations with liquidators.

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