From $3 billion to zero in just 3 days.
The Fall of Su Zhu: From Cryptocurrency Empire to Cage.
Behind the largest collapse in the cryptocurrency world is a story filled with ambition and loss of control.
Warning signs had long existed, yet people often chose to ignore them:
Meet Su Zhu:
A Singapore entrepreneur and co-founder of Three Arrows Capital (3AC).
Once upon a time, he was a legendary figure in the crypto space, accumulating billions in assets through bold strategies and high leverage.
However, in just 72 hours, his wealth empire collapsed.
In 2012, Su Zhu was just an ordinary trader at Deutsche Bank.
By 2021, he had taken control of Three Arrows Capital, the most influential hedge fund in the cryptocurrency field.
His methods were bold and aggressive, viewed by many as the flawless genius.
But in fact, his success was more like a high-risk gamble.
The secret to his success: Reckless borrowing.
Three Arrows Capital crazily borrowed from all sides:
• BlockFi
• Voyager
• Genesis
• Anyone willing to lend money
Then he continued to borrow more money with the borrowed funds.
This is a seemingly brilliant yet fundamentally fragile financial game.
But what is truly shocking is:
They weren't just betting with their own money; Su Zhu and Three Arrows Capital also controlled:
• Wealthy funds in the cryptocurrency space
• Trust reserves from industry veterans
• Huge investments from other hedge funds
Meanwhile, Su Zhu was confidently discussing the 'super cycle' on social media, spending millions on rare NFTs.
What seemed like rock-solid wealth was actually an illusion built on a house of cards.
The signs of crisis had long been present; the issues at Three Arrows Capital were apparent:
• No risk management: All operations rely on the 'ideal performance' of market conditions.
• Extreme leverage: Continuously borrowing money to invest, forming a vicious cycle.
• Complete lack of transparency: Investors were completely unaware of the company's true situation.
But everyone is too busy making money to pay attention to these hidden crises.
Until May 2022, when LUNA collapsed.
Three Arrows Capital bet over $500 million on LUNA, which evaporated within 48 hours.
However, this was just the beginning of the disaster...
Bitcoin began to plummet, and all crypto assets collapsed one after another.
Three Arrows Capital's leverage strategy quickly turned into a fatal shackles:
When you use $2 billion in crypto assets to secure a loan of $1 billion, and the asset value drops by 50%, there is only one outcome—bankruptcy.
Creditors began chasing debts frantically:
"Where's our money?"
Su Zhu's response was: completely out of contact.
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