Conversation
2) From Nov 2020, we entered into an agreement with 3AC in which we would pay them a fee to use their trading accounts.
17
40
613
3) As a delta neutral market maker in the crypto markets, we are very sensitive to trading fees. When you are trading 9 figures USD per day, even 1 bip on 100,000,000 is $10,000. If you are doing that every day, it adds up to a lot very quickly.
6
29
707
4) So our agreement with them was: we withdraw whenever we want. 100% of the PNL belongs to us. They are never to move our funds without permission (increases the risk of our positions getting liquidated) and in return, we pay them fees for their service.
3
26
671
5) This was a mutually beneficial relationship for over 1.5 years. We had known them since 2018, thought they were competent and didn’t think they were degen enough to lose billions and not employ basic risk management.
24
126
1,107
6) On June 12th, with the market dropping and needing some funds from the account for positions on other exchanges, we asked for a withdrawal from the Ops team which was honored.
2
17
612
7) On June 13th, with the continuation of the drop, we asked for a bigger withdrawal. There was no reply but we didn't think much of it at the time. After a while, the market stablized so we no longer needed the funds. We thought maybe they were just busy.
9
38
656
8) Fast forward to 24 hours ago, our funds monitoring script noticed that ~1m was missing from our accounts with them. We reached out to , the Ops team on Telegram about the missing funds- no replies. We tried calling them- they were online and they didn't pick up.
15
102
966
9) Then our traders noticed that there were a few rumors circulating on Twitter speculating on 3AC’s insolvency. Since we were directly involved, we felt the need to tell the world about what had occurred and gauge the extent of the 3AC contagion.
2
33
801
10) A lot of people have reached out about what they know- many of whom have direct relationships with 3AC as well.
3
15
628
11) What we learned is that they were leveraged long everywhere and were getting margin-called. Instead of answering the margin calls, they ghosted everyone. The platforms had no choice but to liquidate their positions, causing the markets to further dump.
48
436
1,980
12) However they still have assets on a number of platforms (you know who you are). We call for you to freeze their assets so that those who 3AC owes can be paid back in the future after legal proceedings.
31
104
1,264
13) FWIW, for the most part, they aren't speculating with clients' money like Celsius was (maybe a thread another day about our dealings with them in 2019), however, here they did use our funds (~1m USD) to answer their margin calls.
26
63
1,092
14) Losing a bet is one thing, but at least be honorable and not drag others into your bets who have nothing to do with it. Certainly don’t ghost on everyone since potentially, they could’ve helped you.
87
141
2,811