Three Arrows Capital co-founder Zhu Su today expressed his dissatisfaction with FTX founder SBF, accusing FTX of illegally selling $1.53 billion in assets belonging to Three Arrows Capital to repay FTX’s debts, ultimately leading to the bankruptcy of Three Arrows Capital. SBF should not be pardoned and should be sentenced to 250 years in prison.
(Background: SBF’s latest prison interview: I gave as much money to the Republicans, but the Democrats left me to die; Diddy treated me “very well”.)
(Background supplement: The court ruled that FTX must expand its compensation to Three Arrows Capital by over $1.5 billion. Will Zhu Su become a major winner with significant SOL and AI company equity?)
Three Arrows Capital was once one of the most significant hedge funds in the cryptocurrency sector, managing up to billions of dollars in assets at its peak. However, in June 2022, Three Arrows Capital faced immense losses due to the collapse of Luna, over-leveraging, and insolvency, ultimately filing for bankruptcy protection and liquidation. With the bankruptcy of 3AC, the assets of its founders Zhu Su, Kyle Davies, and their wives amounting to $1.14 billion were frozen by the British Virgin Islands court. Zhu Su and Kyle Davies were both sentenced to four months in prison (Zhu Su has completed his sentence and been released, while Kyle Davies has left Singapore and has not yet served his sentence).
Initially, Three Arrows Capital filed a $120 million claim against FTX in June 2023, which was later expanded to include allegations of default, unjust enrichment, and breach of fiduciary duty. After a lengthy legal battle, a U.S. bankruptcy court recently ruled that Three Arrows Capital can expand its claim against FTX’s bankruptcy assets to $1.53 billion.
Court documents indicate that as of June 12, 2022, 3AC held $1.53 billion in assets at FTX, but within the following two days, those assets were used to repay FTX’s $1.5 billion debt. The FTX liquidation team initially attempted to prevent the expanded claim, arguing that the timing was inappropriate and lacked legal basis, but the court ultimately determined that 3AC had the right to make additional requests, citing FTX’s delays in providing financial records, which hindered 3AC’s investigation.
It is noteworthy that to this day, Zhu Su still seems to hold a grudge against FTX. FTX creditor MBottjer tweeted today that 3AC requested the bankruptcy court to allow its claim against FTX to increase from $120 million to $1.53 billion, based on 3AC’s assertion to the court that it recently discovered evidence indicating that, two weeks before 3AC entered liquidation, FTX liquidated approximately $1.53 billion in assets, far exceeding the initially claimed $120 million.
MBottjer mentioned that 3AC stated it could not have been aware of this situation earlier because FTX itself was in bankruptcy and possessed critical information; 3AC only obtained sufficient details after the official claim deadline had passed.
In response, Zhu Su stated that FTX indeed violated regulations by selling off assets valued at $1.53 billion belonging to Three Arrows Capital and converting them into dollars in May 2022. These assets were not lent to FTX, and FTX had no right to liquidate them. He angrily remarked that SBF, who has already been sentenced to 25 years, should serve a longer term:
“No pardon for SBF; he should be sentenced to 250 years in prison.”
“Yeah they basically sold huge % of the coins we had on FTX into dollars, in May 2022. They had no right to, these were not ‘lent’ to FTX. No pardon for SBF, lock him up 250 yrs.”
In fact, Zhu Su has long been dissatisfied with SBF. After the FTX collapse, he criticized SBF in December 2022, accusing him of being the mastermind behind the fall of 3AC. SBF vehemently denied the accusations and claimed there was no evidence to support them. Zhu Su retorted that the U.S. Justice Department would uncover the truth.
“How would you know? Thought you claimed you aren’t aware of what happens at Alameda? It’s OK we can let DoJ decide.”
