Zhu and Davies have announced the launch of 3AC Ventures, which will focus on “superior risk-adjusted returns without leverage”.
Co-founders of the bankrupt crypto hedge fund Three Arrows Capital, Su Zhu and Kyle Davies, have resurfaced with a new venture capital (VC) fund called 3AC Ventures. The new fund aims to invest in projects that contribute to the decentralized future of finance without relying on leverage.
The Rise and Fall of a Crypto Star
Founded in 2012 by Chu and Davies, Three Arrows Capital began as a foreign exchange arbitrage firm. However, the firm pivoted to cryptocurrencies in 2017. At its peak, the fund managed about $18 billion in assets and backed projects like Aave, Avalanche, Luna, Solana, and Polkadot.
When the Terra Luna ecosystem imploded in 2022, 3AC was caught flatfooted. With creditor claims exceeding $3 billion, Three Arrows Capital filed for bankruptcy in June 2022 in the British Virgin Islands. Since then, its founders disappeared from public view until now.
The Launch of 3AC Ventures by Three Arrows Capital’s Founders
In a surprising turn of events, Zhu and Davies have announced the launch of 3AC Ventures, which will focus on “superior risk-adjusted returns without leverage”. The new fund will invest in projects within the OPNX ecosystem through its partnership with Open Exchange (OPNX).
Interestingly, Zhu and Davies co-founded OPNS in Zhu and Davies in April 2023. Thereafter, it launched its native token, OX, in May 2023. Since then, the OX token has reached a fully diluted market cap of $300 million at the time of writing. OPNX also surpasses $30 million in daily average volume
Meanwhile, 3AC liquidators have filed a motion against Davies for contempt of court. According to the creditor’s legal team, Davies and Zhu have not been forthright about the case. The duo have been accused of hiding their whereabouts and failing to engage in asset recovery. However, the filed motion does not apply to Zhu who is a Singaporean citizen.
Consequently, the launch of the VC fund has polarised the crypto market. While some consider the move to be a good one, others are wary of the competence of the founders. Despite these adverse sentiments, Davies remains undeterred in promoting the new VC firm’s goal. “We are keen to collaborate with those brave enough to tackle the most significant challenges and create cutting-edge products,” said he.