3AC co-founder claims DCG and FTX colluded to attack Terra LUNA, stETH 3AC co-founder claims DCG and FTX colluded to attack Terra LUNA, stETH
Zhu said DCG is worthless, adding that Genesis creditors will push it into bankruptcy soon.
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Updated: Aug. 15, 2023 at 3:51 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bankrupt firm Three Arrows Capital’s co-founder Zhu Su alleged that Digital Currency Group (DCG) and FTX conspired to attack Terra LUNA and staked Ethereum (stETH) in a Jan. 3 Twitter thread.
The hedge fund co-founder said this was possible because of the close relationship between Sam Bankman-Fried and DCG CEO Barry Silbert. According to Zhu Su, SBF was on the board of embattled DCG’s subsidiary, Genesis, which later granted the first FTT-backed loan.
Over the past year, Genesis received billions of FTT tokens from Alameda Research and FTX, both of which have collapsed.
Zhu added that DCG took substantial losses from the bankruptcy of firms involved in its Grayscale’s Bitcoin Trust (GBTC). However, instead of restructuring its businesses, DCG employed misdirection tactics that allowed it to keep operating while insolvent and hoping the market would recover.
Zhu said:
“[DCG] fabricated a left pocket right pocket callable promissory note that magically filled the hole. This is like a kid losing at poker and saying, “I am fine, my dad will pay you, let me keep playing,” but if your dad is actually yourself.”
The bankrupt hedge fund co-founder said, “DCG value is 0.” He added that FTX creditors have a case of fraudulent conveyance on Alameda’s capital returns to Genesis. He claimed:
“Genesis creditors will push it into bankruptcy and take remaining dcg assets in coming days either way, they are likely demanding Barry pays back his cashouts the easy way instead of waiting for a DoJ criminal case with restitution punishments.”
Meanwhile, DCG has faced increased scrutiny over its financial health recently. Gemini co-founder Cameron Winklevoss gave a Jan. 8 deadline to the firm to resolve the issues surrounding its earn customers.
Mentioned in this article
FTX Token 
Terra Classic 
FTX 
Alameda Research 
Digital Currency Group 
Gemini 
Genesis 
Grayscale Investments 
Su Zhu 
Barry Silbert 
Sam Bankman-Fried 
Cameron Winklevoss Posted In: Bear Market
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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In this article
FTX is a cryptocurrency derivatives exchange that offers futures, leveraged tokens and OTC trading.
Terra Classic
$0.00011
Terra is a blockchain protocol that uses fiat-pegged stablecoins to power price-stable global payments systems.
FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Alameda Research
Alameda Research was once a principal trading firm, operating as an arm of the failed crypto exchange, FTX.
Digital Currency Group
Digital Currency Group’s mission is to accelerate the development of a better financial system.
Gemini
Gemini is a regulated digital asset exchange and custodian that allows customers to buy, sell, store, and stake digital assets in a regulated, secure, and compliant manner.
Genesis
Genesis is an institutional digital asset markets and a full-service digital currency prime brokerage providing a single point of access for select qualified individuals and global institutional investors.
Grayscale Investments
Established in 2013 by Digital Currency Group, Grayscale Investments is a trusted authority on digital currency investing and cryptocurrency asset management.
Barry Silbert, recognized as a foundational figure in the cryptocurrency landscape, serves as the CEO and founder of Digital Currency Group (DCG).
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.
Cameron Winklevoss, a renowned figure in the cryptocurrency sector, is a Harvard University graduate with a degree in Economics and holds an MBA from Oxford University.