The aftermath of Three Arrows Capital’s Liquidation 👀
As a crypto enthusiast, it’s essential to stay informed about the recent events in the industry. One such event is the liquidation of Three Arrows Capital (3AC) seeking $1.3 billion from TerraForm Labs Pte., which was co-founded by Do Kwon. The liquidators are requesting this amount due to the losses incurred by 3AC following the crash of TerraUSD (UST) and Luna (LUNA) tokens in the year 2022.
The Allegations and Claims 📉
- Do Kwon, the co-founder of TerraForm Labs, is facing a massive claim of $1.3 billion from the liquidators of Three Arrows Capital. This claim is directly linked to the losses experienced by 3AC after the crash of TerraUSD (UST) and Luna (LUNA) tokens.
- The liquidators have filed a document in the U.S Bankruptcy Court for the District of Delaware outlining how TerraForm Labs engaged in manipulating the open market for LUNA and UST, leading to inflated prices that induced 3AC to purchase these assets.
- This manipulation tactic allegedly resulted in significant losses for 3AC on its investments in these tokens and other holdings.
The Immediate Fallout and Legal Actions ⚖️
- Three Arrows Capital, a prominent cryptocurrency hedge fund, collapsed in the wake of the Luna and TerraUSD crash, along with several other crypto businesses.
- Following the bankruptcy, liquidators from Teneo were appointed by a British Virgin Islands court to recover assets for the creditors of 3AC.
- In recent developments, the Securities and Exchange Commission (SEC) announced that Terraform Labs and its former CEO, Do Kwon, have agreed to a settlement of approximately $4.5 billion after being found liable for civil fraud charges related to the collapse of TerraUSD (UST) and Terra (LUNA).
The Financial Impact on Three Arrows Capital 💸
- Court documents reveal that 3AC obtained $190 million worth of Luna in January 2022 as part of a $1 billion deal with other investment firms.
- By late April 2022, 3AC was holding $462 million worth of Luna, which dramatically decreased to $2,700 by May 14 after a TerraUSD sell-off.
- Additionally, the net value of 3AC’s other digital holdings reportedly plummeted by $858 million in the same period.
Preparing for the Future 🚀
With TerraForm filing for Chapter 11 bankruptcy earlier this year and the legal issues surrounding Do Kwon, it is evident that the aftermath of the Three Arrows Capital liquidation will have lasting repercussions on the cryptocurrency industry. Stay informed and navigate these turbulent waters with caution.
Hot Take: Stay Informed and Remain Vigilant 🕵️
As a crypto enthusiast, it’s crucial to keep abreast of the latest developments in the industry, especially concerning significant events like the Three Arrows Capital liquidation. By understanding the implications and fallout from such incidents, you can make more informed decisions in your crypto journey. Remain vigilant and stay informed!
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