The 3AC Recovery Makes Progress

In todays edition of YIYL (You Invest, You Lose), we start to unpack the coffin that is the CEFI/DEFI love fest that turned out to be a financial orgie that man didn't make it out of alive. If you were a CEFI lender offering yield you were either directly arbing grayscale and clipping the twenty percent on anchor or you did it indirectly through a hedge find like 3AC.

When Luna couldn't sustain the subsidy and wanted to reduce the APY on anchor and the premium on GBTC started to close shit got real for these yield-chasing businesses and they found themselves in positions they couldn't unwind. Some blew out their balance sheet and tried to cover it up with riskier bets, and others tried to raise more capital but it clearly didn't work, if we look at the long list of companies filing for bankruptcy.

The path toward recovery

Liquidators for Three Arrows Capital have seized $35.6 million from the collapsed crypto hedge fund’s bank accounts in Singapore, three months after getting the nod from that country’s High Court. The probe inside the firm's assets ranges across different countries so tracking them all down isn't easy and requires plenty of legal hurdles to cross.

The money seized by Teneo – the New York-based liquidation firm appointed by a British Virgin Islands court – is the largest chunk of money obtained since Three Arrows imploded in July.

According to a presentation used in a court hearing on Friday, liquidators have also recovered $2.8 million from forced redemptions of investments, as well as an unspecified number of crypto tokens and non-fungible tokens (NFTs).

Another 30 million windfall

According to liquidators Su and Davies made payments for the yacht called Much Wow, with funds coming directly from the company’s coffers. When 3AC went tits up payment for the Yacht stopped and liquidators say the ship was put back on the market by San Lorenzo.

Sanlorenzo holds the proceeds from the sale of the Much Wow and will distribute the money to a holding company called Much Wow Ltd., which liquidators have filed a $30 million claim against in the Cayman Islands.

If successful that clawback would bring the recovery close to 70 million or around 2% of the balance sheet. If that were to be handed back to creditors they would get 2 cents on the dollar for their troubles.

A long way off the total amount

Now the amounts liquidators have been able to secure is a sizable amount for any normie like myself, but it's not going to make much of a difference to the creditors of 3AC. According to reports of 3ACs books they owe $3.5 billion, with the largest creditor having a debt of $2.36 billion, which is Genesis Lending.

This just goes to show how crazy and foolish people get in a bull market who the fuck would hand over 3 billion dollars to two unproven traders and do it without any collateral or using really shitty collateral that was basically illiquid?

Lending purely on reputation is dumb and these companies got what's coming the only shit thing is it wasn't all company money but customer deposits too, which are all frozen in this daisy chain of liquidations.

Have your say

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Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment, "I am a Jessie."

Let's connect

If you liked this post, sprinkle it with an upvote or esteem and if you don't already, consider following me @chekohler and subscribe to my fanbase

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