List of 3 Arrows Capital Creditors

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Contributor, Benzinga
July 19, 2022

The collapse of 3 Arrows Capital, one of the largest hedge funds in crypto, was more monumental than it was surprising. Just in March of 2022, 3AC managed assets worth about $10 billion. Now, 3 Arrows Capital owes about $3.5 billion to a long list of creditors. 

The list of the biggest creditors further shocked the crypto community when it was released Monday. The list was included in an 1,157 page document filed by Teneo, the company chosen to oversee 3AC’s liquidation. Some of the information was already public like Voyager Digital’s $661 million exposure, but this list exposed even larger creditors. The bombshell filing revealed that the crypto broker, Genesis, filed a claim for a staggering $1.2 billion from 3AC. This is after the company liquidated another $1.14 billion in assets, meaning that 3AC owed the company a total of more than $2.34 billion. Digital Currency Group, the parent company of Genesis, assumed the entire remaining $1.2 billion claim.

The same day the document was made public, another creditor, Soldman Gachs on Twitter, claimed that even the controversial co-founder, Zhu Su filed a lawsuit against his own company for $5 million. He also said Chen Kaili Kelly, the wife of other co-founder, Kyle Davies, filed a claim for $66 million. Gachs mentioned a few other creditors that didn't appear on the liquidation document in his thread including Algorand, the proof of stake Layer 1 blockchain, and BlockFi, one of the top centralized crypto lending platforms.

List of 3 Arrows Capital's Creditors

Here is the still incomplete list of creditors released in the liquidation filing:

CreditorPrinciple Amount/Recall AmountLiquidated Capital
Equities First Holdings LLCUS$31,133,100
US$38,841,600
US$45,745,300
US$44,339,500
1,000,000 GBTC.US
1,500,000 GBTC.US
2,000,000 GBTC.US'
2,000,000 GBTC.US
Voyager Digital LLC15,250 BTC
350,000,000 USDC
Unknown
Tower Square Capital Limited106.620552 BTC at 3.5% interest
52.32976266 BTC at 3.5% interest
13206.76723 USDC at 5% interest
1098257.337 USDT at 5% interest
23285.24488 USDT at 7% interest
Unknown
Ashla International Inc500 BTC
10,000,000 USDT
Unknown
Plutus Lending LLC10,000,000 USDTUnknown
Connor Zautke12.7233 BTC
109.4143 ETH
Stephen Zautke218.3534 BTC
1,735.3587 ETH
LuneX Ventures LP88 BTC
Kenrick Drijkoningen55 BTC
US$250,000
Unknown
Play Future Fund LimitedUS$600,000 capital call
Banton Overseas Limited150 BTC at 4% interest
387 ETH at 4% interest
Unknown
Moonbeam Foundation Ltd200,000 MOVR
10,000,000 GLMR
Unknown
Moonbase One Ltd7,000,000 USDC
10,000,000 USDC
Unknown
PureStake Ltd8,000,000 USDCUnknown
Livetree Community LtdUS$300,000
10,000 DOT
Unknown
Onchain Custodian30.18386678 BTCUnknown
Singapore Bitget Pte LtdUS$16,322,226US$6,615,000
SBI Crypto Co Ltd362.82191561 BTC506.69 ETH
210K Capital, LP67.43745958 BTC
0.76355046 BTC
Unknown
Hashkey Trading444,196.08 USDT69.21 BTC
(accounted for in
balance principle)
FalconX LtdUS$65,474,982.33Unknown
Mirana CorpUS$13,062,418.07US$37,098,062.97
(accounted for in
balance principle)
CoinList Services LLC35,000,000 USDCUnknown
DRB Panama Inc1300 BTC
15,000 ETH
Lender indicated they
are liquidating account
Genesis Asia Pacific Pte LtdUS$2,360,302,0652,125,794 shares of
Grayscale Bitcoin
Trust
446,928 shares in
Grayscale Ethereum
Trust
2,076,238 shares in
Grayscale Bitcoin
Trust
13,241,612 shares of
Grayscale Bitcoin
Trust
2,739,043.83 AVAX
tokens
13,583,265 NEAR
tokens
Arrakis Capital20,000,000 USDCUnknown
Celsius Network50,226,027.40 USDC
25,118,150.68 USDC
Unknown

How Did 3 Arrows Capital Collapse?

The implosion of 3 Arrows Capital is not exactly surprising after you see what the firm was doing with its funds. Its general strategy was to borrow money from creditors and invest in generally small and nascent crypto companies and projects. The profit potential for this strategy was massive but so was the risk. The fund's credibility was able to overshadow this shockingly risky strategy. It has been around for about a decade so the crypto community assumed it knew what it was doing.

The likely direct cause of 3AC's insolvency was the crash of terraUSD and Luna cryptocurrencies which cost investors upwards of $60 billion. 3AC claimed that it only invested $200 million in Luna but others in the industry claim the fund's exposure was almost 3 times that. The Luna collapse was probably merely the last straw that broke the fund because of its extremely overextended and overleveraged position. It may have only led to the first margin call or 2 which in turn led to more until 3AC was insolvent and $3.2 billion in the hole. This domino effect didn't stop with the fund. It rampaged through many of 3 Arrows Capital's top creditors and even made the large crypto exchange, Voyager file for bankruptcy.

What Will 3 Arrows Capital Do Next?

In short, the remaining assets held by 3 Arrows Capital will be liquidated and split between the remaining creditors. The effects that the collapse of 3AC brought to the crypto market are likely not over yet, however. The full list of creditors still hasn't been released, though it's likely most of the largest ones were included in this list. There are still multiple massive funds investing using similarly risky strategies too.

For example, Tether or USDT, the largest stablecoin in the world by a huge margin seems to be doing something similar. This was discovered the last time it released information on the contents of its reserves used to support the peg to the USD when it was forced to by the New York Attorney General after lying about its reserves for years. About half of the reserves (worth much more than 3AC ever managed) were in the form of commercial paper, a risky form of uncollateralized debt. It didn't even say which companies it lent to. Tether has been able to honor withdrawals through a couple of small bank runs since this info was revealed but this may not always be true. Hopefully, the crypto market learned a painful but extremely important lesson about leverage from the 3AC collapse and this won't happen again.

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About Henry Stater

Henry is an expert in all things crypto. He stays up to date with all the latest coins, platforms and technologies in the field. He has particular expertise in the burgeoning decentralized finance ecosystem and loves trying out all the new platforms. He also always follows major events in other financial markets and geopolitics as a whole, especially when an event’s effects ripple through the crypto market.