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OPNX Reveals Venture Capital Backers

by Blockchain NewsApril 22, 2023

OPNX, a new exchange founded jointly by members of the Three Arrows Capital (3AC) and Coinflex teams, has revealed the venture capital firms that are backing the project. The announcement came in the form of a video posted by the company on April 21, in which CEO Leslie Lamb thanked some of the major backers of the project, including AppWorks, Susquehanna (SIG), DRW, MIAX Group, China Merchant Bank International, and Token Bay Capital.

Despite the announcement, OPNX has faced criticism in the crypto community due to its association with the bankrupt 3AC hedge fund. Some firms have claimed they may refuse to associate with anyone who helps fund the new exchange. However, the company behind the project has defended itself, arguing that it will help make customers of failed crypto ventures whole again.

According to early fundraising documents, OPNX will allow traders to buy and sell claims against bankrupt firms such as 3AC and FTX. The exchange aims to create a secondary market for these claims, allowing investors to potentially profit from them.

The backers of OPNX have previously funded various tech and financial projects. For example, SIG was one of the early backers of TikTok, and MIAX Group owns a U.S.-regulated equities and options exchange. AppWorks is also listed on Crunchbase as a partial owner of Uber.

However, at least one of the firms mentioned in the video has denied funding the project. DeFi trading firm Nascent stated that it bought Coinflex tokens issued by the company’s previous incarnation but did not participate in a funding round for OPNX.

Three Arrows Capital was a crypto hedge fund founded in 2012. In June, it was issued a notice of default by Voyager Digital after allegedly failing to pay 15,250 Bitcoin (BTC) and 350 million USD Coin (USDC) that had been loaned to it. The hedge fund filed for bankruptcy on July 1, and some creditors have accused the founders of being “on the run” or hiding from the bankruptcy court.

Despite these controversies, OPNX seems determined to move forward with its plans. By creating a secondary market for claims against bankrupt firms, the exchange aims to provide a new avenue for investors to potentially profit from these types of investments. However, it remains to be seen how successful the venture will be, especially given the backlash it has received from some corners of the crypto community.

Overall, the emergence of OPNX highlights the growing interest in crypto-related investment opportunities, as well as the potential risks and rewards of these types of investments. As the crypto market continues to evolve, it is likely that we will see more projects like OPNX emerge, each with their own unique opportunities and challenges.

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Digital Currency Group Reports Over $1 Billion Loss Due to 3AC Collapse

by Blockchain NewsMarch 5, 2023

Digital Currency Group (DCG), a cryptocurrency venture capital conglomerate, has reported losses of over $1 billion in 2022. The losses were primarily due to the collapse of Three Arrows Capital (3AC), a crypto hedge fund that DCG had invested in, and falling cryptocurrency prices.

According to DCG’s Q4 2022 investor report, the losses were mainly caused by the impact of 3AC’s default on Genesis, DCG’s lending arm. Genesis filed for Chapter 11 bankruptcy in late January, as it was 3AC’s largest creditor, having loaned the now-bankrupt hedge fund $2.36 billion. 3AC filed for bankruptcy in July 2022.

DCG’s fourth-quarter losses came to $24 million, while revenues came in at $143 million. Full-year revenues for DCG came in at $719 million, with total assets of $5.3 billion. DCG’s cash and liquid holdings amounted to $262 million, and its investments, such as shares in its Grayscale trusts, amounted to $670 million. The remaining assets were held by divisions of its asset management subsidiary Grayscale and DCG’s Bitcoin (BTC) mining business, Foundry Digital.

DCG’s equity valuation came in at $2.2 billion, with a price per share of $27.93, which the report said was “generally consistent with the sector’s 75%-85% decline in equity values over the same period.” However, the company said it “hit a milestone” with the restructuring of Genesis.

In February, DCG proposed an agreement that would see its equity share in Genesis’ trading entity contributed and all Genesis entities brought under the same holding company, with its trading entity sold off. DCG would also exchange an existing $1.1 billion promissory note due in 2032 for convertible preferred stock, and its existing 2023 term loans with an aggregate value of $526 million would be refinanced and made payable to creditors.

According to a Genesis creditor, the plan “has a recovery rate of approximately $0.80 per dollar deposited, with a path to $1.00” for those owed money by the firm.

DCG declared on November 1, 2021, that its valuation was more than $10 billion, following the sale of $700 million worth of shares to companies like Alphabet Inc., Google’s parent company. However, the recent losses have brought its valuation down significantly.

The collapse of 3AC and Genesis’ subsequent bankruptcy filing has had a major impact on DCG’s financials. The company will need to continue to navigate the volatile cryptocurrency market and work towards resolving its outstanding liabilities to regain investor confidence.

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Tagged : Bankruptcy / CRYPTOCURRENCY PRICES / Digital Currency Group / Losses / News / Three Arrows Capital

Illuvium Community Blocks NFT Event Over Controversial Figure

by Blockchain NewsMarch 4, 2023

Illuvium, an interoperable blockchain game, is working to be a leader in decentralized governance and Web3 gaming. As part of this mission, the project’s community leveraged its decentralized autonomous organization (DAO) to cancel an NFT pack-opening event between Illuvium CEO Kieran Warwick and Three Arrows Capital (3AC) founder Su Zhu. The event, an “Influencer Illuvitars D1sk Battle,” was part of a series where prominent crypto personalities go against each other to open NFT packs.

However, due to the controversies surrounding Zhu and 3AC, Illuvium’s community expressed concerns over the potential risks of being associated with Zhu, who currently faces various accusations of unethical behavior. Illuvium’s CEO suggested that the matter be voted on by its decentralized council, and following this, the council unanimously voted to cancel the event to avoid any association with Zhu.

According to Illuvium’s council member Deraji, the Illuvium project is committed to avoiding potential association with unethical individuals and incidents that may impede mainstream adoption. “In this case, the community made their collective voices heard that this event risked the reputation that the DAO has worked so hard to build. We leveraged our governance model to avoid having our most well-known figure share a stage with Zhu,” Deraji explained.

The Illuvium CEO accepted the outcome and voiced his confidence and belief in the community’s decision. “Although I weighed the benefits against the drawbacks, I will always respect the council’s verdict,” he said.

The DAO’s decision to not risk association with 3AC may have saved them from potential repercussions. On Feb. 10, a crypto exchange project associated with 3AC triggered a backlash from members of the crypto community. Many people were enraged by the launch, with some swearing never to use the exchange.

Additionally, community members have constantly voiced their disapproval of Zhu for his role in the 3AC bankruptcy. On Jan. 3, the 3AC founder started firing off accusations at the Digital Currency Group, alleging that it conspired with FTX to target Terra. However, community members called out to Zhu and asked him to focus on his own misdeeds.

This incident highlights the power of decentralized autonomous organizations and the importance of avoiding potential association with individuals who may harm a project’s reputation. By listening to its community and leveraging its DAO, Illuvium was able to make a decision that aligned with its values and mission.

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Tagged : Daos / Decentralized Governance / Illuvium / News / Nfts / Three Arrows Capital

3AC Withdraws $45m from Curve and Convex amid Bankruptcy

by Blockchain NewsSeptember 7, 2022

Three Arrows Capital (3AC) might have declared bankruptcy, but the firm is still conducting a number of robust transactions, according to insights derived from on-chain data.

The company, which was also declared as a liquidated entity by a court in the British Virgin Islands, has unstaked a total of 20,945 staked ether (stETH), worth $33.3 million, from Curve Finance.

The transaction was discovered in part because the crypto analytics platform, Nansen, had already marked the wallet address used for the transaction as belonging to 3AC. Su Zhu ran the firm and also withdrew some funds, including 2,421 wrapped ether (3.98 million), 202.7 wrapped bitcoin ($4 million) and 4,051,367 USDT stablecoins from the Convex Finance protocol as well.

The wallet address attached to Three Arrows Capital that was used to initiate the transaction with Curve is also what is being used to keep hold of the unstaked $45 million. According to the balances in the Wallet at the time of writing, a total of $57.86 million.

Prior to its liquidation and subsequent bankruptcy, 3AC was a highly capitalized firm, serving as both a hedge fund as well as an active investment outfit in the broader Web3.0 ecosystem. The trading platform is known to be the prominent backer of key projects like Fireblocks and Terraform Labs.

The bet on Terraform Labs fueled its downfall, and the cataclysmic impact accounts for what has dragged many other crypto firms like Voyager Digital into the bankruptcy circle.

According to liquidation proceedings, it was discovered that the embattled crypto hedge fund owed as much as $3.5 billion to creditors, one of whom was Blockchain.com.

While Teneo Restructuring is in charge of the liquidation proceedings, some investors, particularly those with small stakes in the firm, can be adjudged as not having a visible edge in reclaiming their funds.

It is not immediately clear what the unstaked funds are meant for, as no comment or reference has been gleaned from 3AC or its representatives.

Image source: Shutterstock

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Tagged : 3Ac / Convex Finance / Curve Finance / Liquidation / News / TENEO / Three Arrows Capital

Su Zhu Worried About Jail Term Over Liquidators Class Action Settlement – Report

by Blockchain NewsAugust 27, 2022

Su Zhu, a co-founder of Three Arrows Capital (3AC), a Singapore-based cryptocurrency hedge fund firm, delivered an affidavit in person in Bangkok, Thailand, on August 19, as reported by Bloomberg on Friday 26th August.

In the affidavit, Zhu accused the firm’s liquidators that they used misleading and inaccurate information in their case associated with Three Arrows and its assets in the High Court of Singapore.

In June, a court in the British Virgin Islands appointed consultancy firm Teneo to liquidate Three Arrows’ assets.

Last month, Three Arrows creditors got an emergency hearing in court where the fund’s liquidators accused the two Three Arrows Capital founders (Su Zhu and Kyle Davies) of failing to cooperate in the liquidation process.

On Monday this week, the Singapore High Court approved requests by advisory firm Teneo to begin the liquidation order in the country. In the court, the liquidators said Zhu and Davies have provided “rather selective and piecemeal disclosures” about the fund’s assets.

In the affidavit, Zhu hit back and accused the liquidators of presenting “inaccurate and misleading” information about the operations, relationships, and timelines associated with Three Arrows Capital and its related entities in their petitions to the Singapore court.

In the affidavit, Zhu identified himself as a director of Three Arrows Capital Pte Ltd. He further said the entity first became a registered fund management firm in Singapore in August 2013 and was eventually licensed on July 31, 2021.

Zhu also described two feeder funds: Three Arrows Fund Ltd registered in the British Virgin Islands, and Three Arrows Fund LP registered in the US state of Delaware. Zhu stated that these entities fed into a master fund (Three Arrows Capital Pte Ltd) named in the affidavit as “the Company.”

The specifics of these representations matter to Zhu as he said the fund’s Singapore entity, Three Arrows Capital Pte Ltd, may not be able to fully comply with the liquidators’ broad demands for information.

In the affidavit, Zhu expressed his fears of “potentially draconian consequences” if Teneo is allowed to exercise its powers to liquidate assets from Three Arrows Capital Pte Ltd.

He also claimed that he and other representatives associated with Three Arrows Capital Pte Ltd could face fines or jail.

Why Did the Firm Collapse?

Three Arrows Capital has been lined up for liquidation several weeks after it was accused of defaulting on multimillion-dollar loans to the crypto firms such as Genesis Trading, Voyager Digital, Blockchain.com, among others.

The problem with the crypto hedge fund firm first started when the market crashed in May. The firm had used borrowed funds to bet big on a number of troubling cryptocurrency projects, including LUNA Terra stablecoin, which crashed to zero when it lost its peg in May, as well as, Axie Infinity, a “play to earn” game that lost almost $700m (£577) to a hack from North Korea last year.

Last month, on July 4^th, Three Arrows Capital filed for Chapter 15 bankruptcy in a federal bankruptcy court in the Southern District of New York in hopes to protect its U.S. assets after a court in the British Virgin Islands ordered the company into liquidation on June 30^th.

After Three Arrows collapsed during the market crash, Zhu and Davies went silent and they were widely thought to be on the run. In the past, they were accused of avoiding questions from creditors and liquidators.

Image source: Shutterstock

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Tagged : Bankruptcy / Liquidation / News / Su Zhu / Three Arrows Capital

Voyager Digital Likely to Resume Withdrawal From August 11

by Blockchain NewsAugust 6, 2022

Earlier on Thursday, Judge Michael Wiles of the U.S. Bankruptcy Court in New York ruled in the favor of Voyager Digital, to receive access to the funds in its custodial wallets to return the $270 million to the affected customers.

Following the ruling, the bankrupt crypto lender has announced that customers with U.S dollars in their accounts can withdraw up to the tune of $100,000 in a 24-hour period.

This process will start exactly one week after the Judge’s ruling and that will be Thursday 11th August.

Although, this reimbursement scheme is highly dependent on if the payment from the Metropolitan Commercial Bank pulls through between 5-10 working days. Once the process is completed, the crypto broker will immediately resume access to in-app cash withdrawals.

Voyager Is Still Restructuring Amidst Bankruptcy

Voyager Digital Holdings suspended withdrawal, deposits, and many other trade offerings on its platform almost a month ago due to the heat of the harsh market condition. The lender’s alleged exposure to Three Arrows Capital (3AC), another troubled crypto lender which faced liquidation, was part of the problems Voyager encountered.

Eventually, Voyager applied for a Chapter 11 bankruptcy with the US Bankruptcy Court of the Southern District of New York.

The bankruptcy request was to allow the beleaguered crypto lender to put up a restructuring plan. Voyager planned to combine the $110 million in cash and owned crypto assets it had at hand with the funds in its For Benefit of customers (FBO) custodial account at Metropolitan Commercial Bank.

On the other hand, Shingo Lavine and his father, Adam Lavine ex-executives at Voyager, both had other plans. They proposed that the crypto lender suspends all its lending activities and instead resume live trades. Thereafter, issue a recovery token to customers to retain them on the platform.

From today’s news, it appears Voyager is keen on sticking to its initial restructuring plans.

While seeking means to settle its clients and investors, Voyager is also considering transferring its ownership in the future. Earlier, Voyager had filed a rejection letter in response to Alameda’s offer to buy out all of its digital assets including the outstanding loans.

Image source: Shutterstock

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Tagged : BANKRUPTCY CASE / Legal / Three Arrows Capital / Voyager Digital

Su Zhu and Kyle Davies Finally Speaks About the Collapse of 3AC

by Blockchain NewsJuly 23, 2022

During an interview with Bloomberg, Su Zhu, and Kyle Davies, the co-founders of Three Arrows Capital (3AC), the troubled hedge fund broke silence on the happenings that they have experienced in the past few weeks.

This was after released court papers claimed that the duo were nowhere to be found and are refusing to cooperate with the liquidation process. No response was gotten from the founders for about five weeks.

Not long after the court’s claim, Su Zhu resurfaced with a tweet displaying an email that his legal team had sent to the liquidators. The email signed by Christopher Anand Daniel who is the Managing Partner of Advocatus Law LLP lashed out at the liquidators suggesting that they were baiting the duo founders. The liquidators were faulting Zhu and Davies for lack of cooperation, and according to Christopher, that was not the case.

Based on Zhu’s response, their once bubbly hedge fund downturned due to their clumsy market speculations which led to soliciting large margin call on loans.

He attested to the fact that those loans should not have been taken in the first place. Both Zhu and Davies described the fall of the hedge fund as a regrettable one per the Bloomberg report. They rebuffed the claim that they had withdrawn huge funds from 3AC before the fall.

3AC’s Collapse Leads to Relocation to Dubai

Meanwhile, many crypto firms had tried to help 3AC and its counterpart who all faced liquidation and bankruptcy.

These firms who acted as creditors to the insolvent firms ended up in debt, Blockchain.com was one of the top creditors of 3AC. Recently, America-based cryptocurrency exchange Coinbase, acknowledged it had not been financially exposed to these bankrupt crypto firms.

Several investors’ loan claims on the hedge fund round up to about $2.8 billion. According to a legal document that was released on Monday, 3AC still owes its creditors and investors up to $1 billion. Coming from Zhu, the hedge fund plans to move its operations to the United Arab Emirates (Dubai). He added that Dubai had to be surveyed before the business finally moves down there.

“Given that we had planned to move the business to Dubai, we have to go there soon to assess whether we move there as originally planned or if the future holds something different for us,”

Image source: Shutterstock

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Tagged : Liquidation / News / Three Arrows Capital / US BANKRUPTCY

MAS Insists Terra, 3AC Unlicensed to Operate in Singapore

by Blockchain NewsJuly 20, 2022

Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS) has corrected the misconception about how some of the most distressing crypto firms are linked to Singapore. Menon indicated that crypto entities like Terraform Labs, the Luna Foundation Guard or Three Arrows Capital are without proper licenses in Singapore.

In his annual report speech for the 2021/2022 financial year, Ravi said claims that Terraform Labs and the Luna Foundation Guard are “Singapore-based” is false, but rather, the duo is “not licensed or regulated by MAS, nor have they applied for any license or sought exemption from holding any license.”

The MAS boss said liquidated Three Arrows Capital is not regulated under the established Payment Services Act but” had operated under the registered fund management regime to carry out limited fund management business” in the country, an activity it has stopped and has “ceased to manage funds in Singapore prior to the problems leading to its insolvency.”

Ravi Menon also shed insights into the status of Vauld Group as an entity that is “currently not licensed by MAS nor has it sought any exemption from holding a licence under the Payment Services Act.” Menon affirmed that Vauld has “submitted a licence application, which is pending review.”

The misconceptions about the status of these companies come off as another false information flying around in the digital currency ecosystem, which Ravi Menon said the MAS has been warning the public about for the past five years. He still reiterated that retail investments in the crypto ecosystem are very risky and that it will organize a dedicated Green Shoots seminar to share its strategies for the crypto ecosystem in August.

The administration plans to broaden crypto regulation in response to the recent market turmoil in the crypto space. The MAS might further tighten retail-investor access to crypto by covering more activities, Menon disclosed without further evaluation. The consultation is expected to conduct during September and October.

The Monetary Authority of Singapore is one of the most bullish regulators when it comes to the embrace of digital currency initiatives. However, the apex bank has never compromised on its standards when it comes to granting licenses to startups offering services in the space, a move that has pushed Binance away from its application to do business in the country.

Image source: Shutterstock

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Tagged : 3Ac / Mas / RAVI MENON / Regulation / TERRAFORM LABS / Three Arrows Capital / VAULD GROUP

MAS Insists Terra, 3AC Unlicensed to Operate in Singapore

by Blockchain NewsJuly 20, 2022

Ravi Menon, the managing director of the Monetary Authority of Singapore (MAS) has corrected the misconception about how some of the most distressing crypto firms are linked to Singapore.

Image source: Shutterstock

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Tagged : 3Ac / Mas / RAVI MENON / Regulation / TERRAFORM LABS / Three Arrows Capital / VAULD GROUP

Su Zhu Amongst Creditors Files $5m Claim against His Own Firm: Sources

by Blockchain NewsJuly 19, 2022

Su Zhu, the co-founder and CEO of bankrupt Three Arrows Capital (3AC), is reportedly amongst the creditors that filed claims against the embattled crypto hedge fund.

This news was shared by a Twitter user named ‘Soldman Gachs’ who also claimed he was one of the creditors of Three Arrows Capital.

“I’ve just seen the list of creditors to #3AC and noticed that @zhusu has filed a claim for $5 million. While being on the run, he has somehow found the time to diligently and ruthlessly fill out forms to pursue a claim against his own Fund,” he said in a tweet.

While the news that Su Zhu filed a claim against his own company may sound bizarre, Soldman Gachs also revealed that ThreeAC Limited, the investment manager of 3AC, also filed a $25 million claim against Three Arrows Capital. The creditor also shared the list of other creditors of the company, citing the likes of Digital Currency Group (DCG), Algorand, CoinList, and the MoonBeamNetwork amongst others.

Teneo Restructuring published the list of the creditors, which is made public for the first time since it was appointed by a court in the British Virgin Islands (BVI) to handle 3AC’s liquidation process. These creditors were reportedly expected to have a meeting on Monday, July 18.

The total value of all claims against Three Arrows Capital came in at $2.8 million, and per Soldman Gachs, some of these creditors filed for just $1 with the right.

It is highly unlikely that 3AC has enough collateral and assets to meet up with all of these claims, a harsh reality that might make some creditors lose their funds. The liquidation process is a cycle in the current crypto ecosystem, and one of 3AC’s creditors, Celsius Network, has also filed for bankruptcy in the US recently.

Image source: Shutterstock

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Tagged : 3Ac / Liquidation / News / Su Zhu / TENEO / Three Arrows Capital