The cryptocurrency world is complicated. In order to make quick money and get rich overnight, many people choose to do things that are borderline and cross-border. In the end, they may also suffer backlash.
On June 15, 2023, news came from the cryptocurrency market that due to the continuous decline in the overall market, the well-known investment institution Three Arrows Capital encountered a margin call. Zhu Su, co-founder of Three Arrows Capital, also posted a message on his social media, saying that "we are communicating with relevant parties and are fully committed to resolving this issue", which indirectly confirmed the rumors.
In fact, the ice is three feet thick, and it is not formed in a day. The frequent collapse of the Luna project has brought extremely negative impacts to Three Arrows Capital. Before June 2023, Three Arrows Capital began to sell a large amount of Ethereum, and its founder even deleted the information related to ETH tokens on his Twitter; then, Three Arrows Capital was exposed to be frantically cashing out stETH to repay debts, and even exposed the scandal of misappropriating user funds privately.
On September 19, Zhu Su, founder of Three Arrows Capital, was arrested at Singapore’s Changi Airport and sentenced to four months in prison, confirming rumors of his bankruptcy.
There is no doubt that Three Arrows Capital plays an important role in the cryptocurrency circle. It is not an exaggeration to call it one of the most successful crypto hedge funds in the world. The incident of Three Arrows Capital has brought an unprecedented impact on the entire cryptocurrency field.
Coincidentally, Do Kwon (Chinese name Quan Daoheng), the founder of the cryptocurrency ecosystem Terraform Labs, also had a similar experience. The cryptocurrencies TerraUSD and Luna he founded collapsed in May 2022, causing global investors to lose approximately $40 billion and suspected financial fraud. On September 19, 2022, the Seoul South District Prosecutor's Office in South Korea applied to Interpol for a red warrant to assist in the pursuit of Do Kwon. On March 23, 2023, Quan Daoheng was arrested in Montenegro, and then US prosecutors accused Kwon of defrauding cryptocurrency customers.
Interestingly, the SEC court documents disclosed a Slack chat process that took place in 2019. The content showed that Do Kwon almost bluntly admitted that they had forged the trading volume. In addition, many explosive "melons" are also hidden in it, and the amount of information is extremely large. For example, Do Kwon said, "I can create fake transactions that look real... This will incur fees"; he made a less positive evaluation of Terra, saying, "Only those who believe that Terra is the jewel in the crown (Hashed, 1kx) and those investors who operate a staking business (polychain) will pledge"; What's even crazier is that Do Kwon directly exposed himself as a wolf, "I also pre-mined 1 billion SDT for ourselves" (There are a large number of various stablecoins growing on the Terra ecosystem, including US dollar stablecoins, Korean won stablecoins, etc. The most special of these is TerraSDT, which is a stablecoin anchored to the IMF's special drawing rights). All these things are shocking.
Perhaps it is because the huge profit margins of virtual currencies are fascinating, or perhaps everyone has experienced the joy of making quick money in the cryptocurrency circle. Since the rise of the cryptocurrency circle, various explosive projects and Ponzi schemes have emerged one after another. Today's star project may become tomorrow's junk scam; today's cryptocurrency bigwigs may become tomorrow's prisoners. So, again, the cryptocurrency circle has risks, please be sure to stay calm and cautious.
