The Untold Story of Crypto’s Biggest Collapse – And the Red Flags Everyone Missed
Meet Su Zhu: A young, ambitious Singaporean entrepreneur with a knack for numbers and an appetite for risk. From humble beginnings as a trader at Deutsche Bank in 2012, he rose to dizzying heights as the co-founder of Three Arrows Capital (3AC), a crypto hedge fund that became the toast of the digital finance world. By 2021, Zhu had built a $3 billion empire. Yet, within just 72 hours, it all came crashing down.
This is the story of how one man’s meteoric rise ended in one of the most devastating collapses in crypto history.
The Making of a Legend
In the early days, Zhu was an ordinary trader, crunching numbers for Deutsche Bank. But the allure of the nascent cryptocurrency market was too strong to ignore. Along with his partner Kyle Davies, he founded 3AC, a fund that quickly gained a reputation for its bold bets and massive profits.
By 2021, Zhu wasn’t just a player in the crypto world—he was a king. His “SuperCycle” theories, predicting endless upward momentum for crypto, earned him a loyal following. His investments ranged from Bitcoin and Ethereum to rare, multimillion-dollar NFTs. Zhu was a poster child for crypto’s promise of untold wealth.
But beneath the surface, cracks were forming.
The Fragile Empire
3AC’s success wasn’t built on prudence but on leverage. Zhu’s fund borrowed staggering sums from crypto lenders like BlockFi, Voyager, and Genesis. With borrowed capital, 3AC placed even larger bets, creating a precarious financial structure that resembled a Jenga tower teetering on the brink.
Even more alarming, 3AC wasn’t just playing with its own money. It managed funds for crypto millionaires, industry veterans, and even other hedge funds.
While Zhu flaunted rare NFTs and preached his SuperCycle gospel, few questioned the foundation of his empire.
The First Domino: LUNA
In May 2022, the LUNA crash sent shockwaves through the crypto ecosystem. 3AC had invested over $500 million in the token, which plummeted to zero in just 48 hours. This was catastrophic, but it was merely the beginning.
As Bitcoin’s value declined, the broader crypto market followed suit. For 3AC, heavily leveraged and exposed, the downturn was fatal.
When crypto assets dropped by 50%, 3AC’s billion-dollar loans became impossible to repay. Lenders came knocking, but there was no money left.
The Fallout
In just three days, Zhu’s empire crumbled.
- Losses: Over $3.5 billion evaporated.
- Bankruptcies: Lenders like Voyager filed for bankruptcy.
- Investors: Thousands of lives were upended.
And Zhu? He disappeared.
The Reckoning
For months, Zhu evaded authorities, living in luxury in Dubai while his investors faced financial ruin. But his luck ran out in September 2023. Caught attempting to flee Singapore with a fake passport, Zhu was apprehended at Changi Airport.
Today, Zhu sits in a Singaporean jail, facing a decade behind bars. His $50 million mansions have been seized. His rare NFTs are worthless. His name, once synonymous with crypto success, is now a cautionary tale.
The Lesson
Su Zhu’s story isn’t just about the collapse of a hedge fund. It’s a stark reminder of the perils of greed, leverage, and unchecked ambition in a volatile market.
In the world of crypto, where fortunes are made and lost in an instant, Zhu’s fall serves as a chilling warning:
Success built on borrowed money is a house of cards waiting to collapse.
In the end, it’s not about how high you rise but how solidly you stand.
