Glossary
Three Arrows Capital (3AC)
The June 2022 collapse of Three Arrows Capital — a once-$10B crypto hedge fund whose leveraged longs on Luna, GBTC, and stETH unwound, taking down many counterparties.
Three Arrows Capital, founded by Su Zhu and Kyle Davies, was one of the largest crypto hedge funds at the 2021 peak. Its balance sheet was concentrated in long positions on Luna, the Grayscale Bitcoin Trust (GBTC), and Lido's stETH — all with significant leverage from CeFi lenders.
The Terra collapse, GBTC discount widening, and stETH liquidity crunch in May–June 2022 unwound the fund's collateral. 3AC defaulted on loans across Celsius, Voyager, Genesis, BlockFi, and others — kicking off the broader 2022 crypto credit crisis. The fund was ordered into liquidation by BVI courts on June 27, 2022.