Financier Founder of Three Arrows Capital Detained in Singapore
In the ever-evolving world of cryptocurrency, the past few months have seen a series of significant events that have shaken the industry.
On Tuesday, the criminal trial against Celsius founder and former CEO, Alex Mashinsky, is set to commence. Meanwhile, across the globe, another high-profile figure in the crypto sphere finds himself in legal trouble. Su Zhu, co-founder of Three Arrows Capital (3AC), was arrested at Singapore's Changi Airport. Zhu's arrest has had a notable impact on the value of OX tokens, which plummeted significantly following the incident.
Prior to its collapse, 3AC was one of the world's largest crypto hedge funds. The firm's downfall has had far-reaching consequences, with Voyager Digital filing for bankruptcy due to its exposure to 3AC, which defaulted on a loan worth more than $650 million. Crypto trading firm Genesis and lender BlockFi also faced losses due to their exposure to 3AC.
The troubles for 3AC started in January when it was revealed that a group, including the 3AC duo, was trying to raise $25 million for a claims trading platform. This platform, OPNX, was launched as an exchange where users could trade claims of bankrupt crypto firms. However, the launch of OPNX raised eyebrows, and a sell-off of $1 million worth of OX tokens caused the value to nosedive.
The collapse of Terra ecosystem in May 2022 left 3AC with significant losses. Do Kwon, founder of Terra, was arrested in Montenegro in March. Zhu and Davies, the co-founders of 3AC, also received similar sentences due to their failure to cooperate with 3AC's liquidation investigation.
In a related development, the launch of OPNX as an exchange for trading claims of bankrupt crypto firms has been met with controversy. Liquidators aim to extract at least $1 billion directly from Zhu and Davies to help pay off the approximately $3.5 billion that 3AC owes to its creditors, with $2 billion owed solely to Genesis.
As the crypto landscape continues to evolve, these events serve as a reminder of the risks and uncertainties inherent in this burgeoning industry. The trials, bankruptcies, and arrests are a stark reminder that the crypto world is not immune to the realities of traditional finance.
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