Three Arrows Capital

About Three Arrows Capital

Three Arrows Capital, also known as 3AC, collapsed in June 2022. The hedge fund managed approximately 10 billion at its peak. Founders Su Zhu and Kyle Davies made leveraged bets on crypto. When crypto prices fell, the fund could not meet margin calls. 3AC defaulted on loans from Voyager, BlockFi, and Genesis. The fund was ordered into liquidation by a British Virgin Islands court. Zhu and Davies initially disappeared. They were eventually found and cooperated partially with liquidators. The liquidators recovered approximately 1.3 billion in assets. The 3AC collapse triggered a chain reaction across crypto markets, contributing to failures at Voyager, Celsius, BlockFi, and FTX. The case demonstrated contagion risk in the interconnected crypto lending ecosystem.