Three Arrows Capital Founders Give Interview from Undisclosed Location
Su Zhu and Kyle Davies gave their first interview since going into hiding, speaking from an undisclosed location about Three Arrows Capital's collapse and their plans to move to the UAE.
On July 22, 2022, Su Zhu and Kyle Davies, both 35-year-old co-founders of the collapsed Three Arrows Capital hedge fund, gave an interview to Bloomberg from an undisclosed location, marking their first substantive public comments since going into hiding following their fund's spectacular collapse. The interview, which alternated between contrition and defensiveness, saw the pair describing what they characterized as a systemic failure of risk management, claiming that easy-flowing credit from lenders had worsened the impact of their wrong-way bets.
Davies told the Wall Street Journal that the fund had been 'caught off guard' by the collapse of Terra/LUNA, despite 3AC being sophisticated investors who should have understood the risks. The founders indicated plans to relocate to the United Arab Emirates, a country that notably lacks extradition agreements with Singapore or the United States, raising concerns among creditors about their ability to hold the pair accountable.
In what became an infamous quote, Kyle Davies was later quoted as saying, 'I really spent so much time meditating in Bali that I'm really just pretty zenned out.' For Bitcoin's history, this interview exemplified the lack of accountability and responsibility displayed by leaders of failed crypto institutions during the 2022 crisis.
Rather than taking full ownership of their disastrous decisions that had caused billions in losses and triggered contagion throughout the crypto ecosystem, affecting Bitcoin holders and countless others, Su Zhu and Kyle Davies attempted to deflect blame onto market conditions and lenders. Their casual attitude and plans to relocate to a non-extradition country while owing creditors billions reinforced the perception that the crypto industry had been dominated by reckless and unethical actors.The interview became symbolic of everything wrong with the overleveraged, poorly regulated crypto trading ecosystem that had grown around Bitcoin.