3AC co-founder Zhu Su accuses DCG of criminal fraud

3AC co-founder Zhu Su accuses DCG of criminal fraud

Three Arrows Capital (3AC), a Singapore-based crypto hedge fund, became one of the many industry participants to go bankrupt in the bear market. At its peak, 3AC managed over $10 billion in assets. Its downfall was catastrophic, but not a purely market-driven phenomenon.

In the latest Twitter thread Zhu Su said the parent company of Grayscale Investments and Genesis Trading conspired with FTX to bring down Terra's LUNA token and Staked Ether (stETH).

Zhu Su blasts DCG and FTX

Both companies – DCG and FTX – suffered heavy losses when 3AC went bankrupt following the collapse of Terra. The contagion caused problems for other firms involved in GBTC, including Babel Finance. The 3AC founder claimed DCG could have “quietly restructured” during the turmoil but chose not to.

"Instead they fabricated a left pocket and right pocket callable promissory note that magically filled the hole. That's like a kid losing at poker saying, 'I'm fine, my dad is paying you, let me keep playing,' but if your dad is really you."

Zhu, who was recently alleged to be on the run, also accused DCG and FTX of misdirecting for months and using various techniques to attack the hedge fund. He further claimed that the two companies collected more deposits while they were bankrupt in anticipation that the market would rise.

"dcg value is 0, criminal fraud, ftx creditors also have a case for fraudulent transfer of Alameda capital returns to Genesis. Most OGs are aware of how close Barry and SBF were from the start (SBF is on board Genesis, they gave him his first FTT backed loan)."

Backlash against DCG founders

The aftermath of Sam Bankman-Fried's crypto empire has become much more chaotic. Gemini co-founder and crypto magnate Cameron Winklevoss accused DCG boss Barry Silbert of “bad faith delaying tactics and claimed his parent company owes its subsidiary Genesis $1.675 billion.

In a Jan. 2 letter to Silbert, Winklevoss said that Gemini had tried on numerous occasions to negotiate a resolution with the chief executive and the company but was unable to do so despite repeated efforts. While accusing the DCG founder of "hiding behind lawyers and investment bankers," he sought answers regarding the $900 million in inaccessible funds deposited by Gemini's 340,000 Earn customers through the Earn program.

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