DCG Accused of Conspiracy and Misleading Three Arrow Capital in Crypto War

Updated: 1 year

• Co-founder of Three Arrows Capital, Su Zhu, has spoken out in a Twitter thread about the escalating crypto war between Digital Currency Group (DCG) CEO Barry Silbert and the Winklevoss twins.
• Zhu claims that DCG conspired with FTX to attack Luna and stETH, and made a lot of money in the process.
• Zhu also alleges that Silbert misled Three Arrow Capital for months, using various methods to attack them.

Su Zhu, a co-founder of Three Arrows Capital, has recently weighed in on the escalating crypto war between Digital Currency Group (DCG) CEO Barry Silbert and the Winklevoss twins, founders of US exchange Gemini. The conflict began when Cameron Winklevoss published an open letter on December 22nd, calling out Silbert’s misconduct and setting a deadline for a resolution by January 8th.

Zhu has voiced his support for the Winklevoss twins’ claims, criticizing Silbert for taking “the money of schoolteachers” to “fuel greedy share buybacks, illiquid venture investments, & kamikaze NAV trades that ballooned the fee-generating AUM of your Trust” for his own personal gain.

Zhu then went on to accuse DCG of conspiring with FTX to attack Luna and stETH, claiming that they made “a lot” of money in the process. He further alleged that DCG suffered significant losses over the summer from the bankruptcy of 3AC, as well as from Babel and other firms involved in GBTC. According to Zhu, instead of calmly restructuring, Silbert and DCG chose to “fabricate a left pocket right pocket callable promissory note that magically filled the hole.” He likened this to a kid losing at poker, who claims that “my dad will pay you, let me keep playing,” but if the dad is actually the same person.

Zhu also claims that Silbert misled Three Arrow Capital for months, “using various methods to attack us and also not have anyone ask the hard questions which are how did Genesis fill the hole.” Further, DCG and FTX were allegedly insolvent, yet continued to accept deposits in the hopes that the market would rise.

With the deadline for a resolution fast approaching, it remains to be seen how the situation will be resolved. In the meantime, Zhu and other crypto industry participants have been vocal in their condemnation of Silbert and DCG’s alleged misconduct.

Our Score