The Story of 3AC - Missing Co-Founders, a Yacht and over $3B owed 🔍
GM,
This is Cryptonite, your twice-a-week shot to stay updated about the crazy world of crypto. We hit you with what’s relevant, upcoming and funny — minus the FUD.
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The 3AC saga continues 🚩🚩
Three Arrows Capital (3AC) was one of the biggest crypto hedge funds, at one point managing over $10 billion in capital— Until the founders dropped off the map.
What’s happening - After making a series of large directional trades and borrowing from 20+ large institutions, Three Arrows Capital (3AC) went bust. Then the founders ran, and defaults have led to confusion and hysteria in the crypto markets. 3AC’s 1000-page court filings were leaked last week. Some highlights we found were:
The total amount owed in the market by 3AC stood at $3.5B.
A cofounder’s wife was owed $66M by 3AC.
The company lost more than $700M in their Luna Investment.
They borrowed from many lenders to pay other existing lenders. Classic.
They bought two Singapore 'Good Class Bungalows' and a yacht that has yet to be delivered.
While all of this is happening, they’ve also been ordered to liquidate by a court in the British Virgin Islands.
This is the portfolio that could likely lead to a massive dump:
Our take: Always DYOR (Do your own research), whether you’re investing or even looking for a new project. Giving all, or even a lot, of your money to one centralised fund could be riskier than any of the plays you would make yourself. Unfortunately, 3AC may end up being an expensive lesson to learn for a lot of investors.
Bitcoin makes a comeback 🥊
Bitcoin is up 25% from last week and the crypto community couldn't be happier.
What’s happening - The world is hoping that we’ve left the bottom and are finally heading up. Bitcoin’s price has increased and currently sits around $23645. To add further, it’s finally ended Bitcoin’s longest ‘extreme fear’ streak. It lasted for 73 days!
Our take: We can already hear the chorus of the ‘Bull market is here, followed by FOMO and people coming in with a now or never approach. But the reality is a little more complex, and many experts still believe we’re going to see the price drop back down further before it peaks again.
Ripple Co-Founder completes 9 Billion XRP tokens Sell-Off after eight years 🤯💵
Let’s go down the rabbit hole of XRP, the 7th largest cryptocurrency with a market cap of $17b and the co-founder who just managed to walk out with $3B+ worth of XRP.
How did this happen?
Jed McCaleb co-founded Ripple in 2012 and created 100B tokens on day 1 with his co-founders. They awarded themselves 60% of it. When the bull market came in, the coin’s value went up, making the co-founders billionaires on paper.
Somewhere in the middle, Jed got into a serious beef with his co-founders and left the project taking 9 Billion XRP (18% of total supply) with him.
Legal battles ensued, and an agreement was reached: Jed could only sell his stash at a limited rate every week, based on the market's daily volume.
Why did the other founders agree to this? To prevent sudden price fluctuations with large sell-offs, and to protect investors.
The strategy worked. In the last 8 years, the XRP price has only fluctuated between $0.22 and $1.84. And finally, Jed has just managed to sell his last batch of tokens and make a nice $3B+ off it.
Our take: The saga is officially over and XRP dumping is about to slow down, which is great news for XRP holders.
Crypto Bytes ₿
Shanghai Allocates $1.5B to Metaverse Development Fund
Recur and Nickelodeon Hey Arnold! and Rugrats NFTs have been running rampant across socials, and are still high on the charts.
Tesla sold 75% of Bitcoin ($936 million), the company reported Wednesday in its earnings report.
Dubai just dropped a Metaverse announcement. The plan seeks to create 40,000 jobs and bring in $4 billion to the Dubai economy.
Hyundai launched their second official NFT collection last week, which acts as an access pass to their upcoming metaverse.
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DISCLAIMER:
None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.