How Low Can They Go: Three Arrows Capital Founders Launch New Memecoin Fund

The founders of the defunct cryptocurrency fund Three Arrows Capital (3AC), Su Zhu, and Kyle Davies, are attempting a comeback in the cryptocurrency space by launching a new crypto fund named “Three Arrowz Capitel” (and yes, that strange spelling is correct) focusing on memecoins. Alongside this announcement, they introduced their own memecoin, $3AC, which quickly surged to a $100 million market cap before dropping to around $50 million.

Previously, Three Arrows Capital was a prominent player in the cryptocurrency investment arena. In 2022, the fund boasted a net asset value of $18 billion, and its co-founders, Zhu and Davies, were celebrated figures in the crypto community. Their portfolio included early investments in major projects like Ethereum, Solana, Polkadot, Avalanche, Aave, Luna, and Worldcoin, among others.

However, when the market crashed in 2022, the fund was hit hard. It struggled under Terra Luna's collapse and failed to repay large debts to crypto lenders. Court documents later revealed that the fund owed $3.5 billion to 27 creditors, including well-known names like Blockchain.com and Genesis Global Trading.

Interestingly, after his own downfall, FTX founder Sam Bankman-Fried pointed to 3AC as a major contributor to the crypto market’s troubles that year.

After the collapse, both Davies and Zhu fled and went on the run. However, Zhu was arrested at Changi Airport in Singapore in September and was sentenced to four months in prison for failing to cooperate with liquidators. Davies, on the other hand, has managed to evade capture and currently remains at large in an unknown location.

Currently, the liquidators are seeking to recover $1.3 billion from both co-founders and have already frozen $1 billion of their assets.

A tarnished reputation, however, did not prevent the founders from launching new projects. In 2023, they introduced the OPNX exchange, designed for trading bankruptcy claims. The project was shut down earlier this year.

The new venture, Three Arrowz Capitel, smells similar to its predecessors. A major concern is the launch of the $3AC memecoin. Analysts report that 84% of its supply is held by the founders and insiders, raising suspicions of another cash grab by the duo. Insiders already started selling the memecoin after it reached a market cap of $100 million.

According to the project’s X page, the fund has already invested $100,000 in Mog Memecoin, which is currently trading at a market cap of $580 million. However, the fund’s overall strategy and future plans remain unclear. So far, it appears more like the duos’ latest attempt to cash in on their audience by exploiting the memecoin trend. The fate of this fund seems likely to follow the same path as their previous ventures.