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Market Recap: Terra, Celsius Updates; Tether Dispels Rumors; Three Arrows Capital Addresses Liquidation Speculations

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Market Recap: Terra, Celsius Updates; Tether Dispels Rumors; Three Arrows Capital Addresses Liquidation Speculations

The cryptocurrency market has seen a series of crises since the beginning of this year, from the collapse of Wonderland in the Frog Kingdom, to Terra, Celsius, and even Three Arrows Capital. Even stablecoin issuer Tether has had to continuously dispel rumors to maintain user confidence. The article summarizes the aftermath of these events, but without an explanation from Three Arrows Capital, even professional data institutions are unable to fully grasp its fund movements or infer the specific extent of losses.

Terra

CoinDesk Korea reported based on an investigation by data security firm Uppsala Security that the U.S. CoinDesk did not cover, indicating that the A wallet, considered the leader behind the UST collapse, is linked to Terra's Binance account, which received funds from LUNC DAO, leading to the speculation that the UST collapse event was orchestrated by Terra.

However, a prominent member of the Terra community forum, FatMan, emphasized that the report was false, stating that the LUNC DAO wallet is actually the hot wallet of the exchange KuCoin; LUNC DAO also stated that they would file a commercial defamation lawsuit if Uppsala Security does not respond within a week.

Celsius

The Wall Street Journal revealed that, according to sources, Celsius has hired the law firm Akin Gump Strauss Hauer & Feld LLP to provide a solution for financial restructuring.

In terms of fund movement, Celsius has paused withdrawals for over 48 hours, with an official tweet stating that a statement will be released at an appropriate time; at the same time, Celsius continues to inject funds into Maker to avoid liquidation.

Furthermore, its native token CEL saw a fivefold increase at one point, but data analysis firm TheKingFisher pointed out that this was due to a short squeeze caused by frontend issues on FTX.

Three Arrows Capital (3AC)

A tweet by trader @MoonOverlord first raised doubts in the crypto community about 3AC, citing several points:

  • Co-founders Zhu Su and Kyle Davies have been inactive on social media for several days.
  • Zhu Su removed all #tokens from his bio and deleted his IG.
  • 3AC continues to inject funds into Aave to avoid liquidation.
  • Lost $30 million on Bitfinex, unable to prove if it was a loss from one-sided trading.

Subsequently, Zhu Su's tweet stated that they are in negotiations to resolve all issues related to the matter, further fueling market suspicions.

What followed was a frenzy in the crypto community tracking 3AC's money flow, including:

However, The Block's Research Director Larry Cermak stated that the address 0x4093, tracked by Onchain Wizard, has been removed from 3AC's label by data firm Nansen, and he holds over twenty wallets related to 3AC, none of which include this address. Most wallets have been emptied, leaving only $90 million, including FTT, stETH, Matic, and other tokens.

If Larry is correct, Onchain Wizard's citation of another address associated with 0x4093, address 0x716, also cannot be confirmed to belong to 3AC. Larry Cermak then pointed out that 3AC had transferred 4.1 million FTT tokens, approximately $90 million, to the exchange Kucoin, possibly planning to transfer out again to avoid further fund tracking.

In summary, even professional data firms have been unable to confirm the total amount of funds liquidated from Three Arrows Capital. The Block's report could only cite anonymous sources claiming that 3AC has been liquidated for at least $400 million.

USDT

Tether, the issuer of USDT, responded to rumors that 85% of its commercial paper is from China or Asia and trades at a 30% discount, clarifying that USDT's reserves are 47% U.S. Treasury bonds and that its lending behavior with Celsius has always been overcollateralized and fully settled. They also stated that they have had no transactions with 3AC.

Lending platform Nexo also tweeted to confirm that they rejected 3AC's request for uncollateralized loans two years ago and that 3AC does not hold any funds on their platform.