The 3AC Story Gets Wilder
A few weeks ago I spoke about the fall of 3AC the shitcoin fund that blew itself up and could not meet redemptions. Plenty of CEFI institutions were exposed to it and now that they cannot meet their obligations their LPs are on the line for the lost funds causing a massive deleveraging in the space as assets are sold off to cover the whole in the balance sheet.
Money is being raised, new lines of credit are extended to these firms like BlockFi and it's a bit of a shitshow to say the least. As the bear market lays bear where the leverage was, where the rehypothecation took place, and where the major frauds are, 3AC seems to be at the center of it.
The story began as a team of investors who were simply way to bullish on market conditions and the future of crypto as many are guilty of, but now as the details of the default come to light, we're seeing a whole new take on it, one of fraud and another massive shitcoin related scam to add to the books.
The numbers are nothing to turn your nose up about
Some say 3AC may have been liquidated for around 400 million USD already while there are claims that 3AC Owes $655 Million to Voyager Digital, they've already been liquidated by BlockFi and a few other providers they worked with so how the hell did one fund manager to acquire this much capital.
So the accusations are as follows, they:
- Falsified records to lenders to get access to these borrowed funds
- The lenders didn't do proper due diligence
- Told OTC desks they head deals and relationships in place that they didn't
- Submitted fake trading records to lending desks
- Took money they managed for DEFI projects as they managed their treasuries
The key passage from OTB328 pic.twitter.com/11tgobyBkN
— On The Brink (@OnTheBrinkCIV) June 25, 2022
Now these are serious criminal accusations and it seems like the overconfidence during the bull market allowed them to get away with it as so much money was flowing into shitcoins and risk was discounted to zero.
As the truth is coming to light we are getting to see the rampant fraud that was propping up this house of cards known as DEFI and CEFI and with so many high-net-worth individuals on the hold for this, you can bet there will be regulators coming in to try and protect future customers from getting involved in services that use services like this.
There is room for wild cat banking I will admit that, but rampant scams and frauds are not one of them.
I will be keen to see how this story, Celsius, Luna, and the rest all end, and what the fallout will be from these scams.
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."
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The whole financial world seems to be on a knife edge and busy collapsing now, taking crypto down with it. Fortunately crypto will rise from the ashes. It may just take until after the next halving in 2024 before we see ATHs again. This will be my second crypto winter so I'm learning patience and frugality lol.
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All cryptos are bleeding out against bitcoin, in the bear market and overtime, no crypto has managed to beat its previous all time high in bitcoin terms, so I am not too bothered with these faux securities really, many of them will be regulated come the next cycle. My focus is really on bitcoin, this is my 3rd cycle now and I've seen it come and go, lol doesn't phase me one bit
I don't even bother pricing in rands anymore, its all about satoshis
Awesome Che, great to hear.
It's all a big mess... and it seems that we're only starting. Over the next year or so many of these funds and companies will probably go under.
What do you think of Crypto.com? You think they are ok?
Lol indeed, its going to be glorious watching these companies crash and burn
Nah just another shitcoin casino that raised a bunch of money from that they say 200 million but I think theres undisclosed funders too, they using their shitcoin to extend runway that's why they scrapped MCO and forced people into CRO so they could dilute them with a new shitcoin.
Wouldn't trust a word they say
We can guarantee that regulation will be coming to try and factor in the way these dudes did it. Sucks when these assholes mess it up for others!
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Absolutely, I am all for open markets, wild cat banking and having the market sort it out as people get scammed and build a world on reputation not regulation, but we're soft and we run to big daddy government when we do dumb shit