DeFiance Founder Had 'No Visibility' on Three Arrows' Condition: Statement
Investment Firm Says It's Been 'Materially Affected' by Hedge Fund's Failure
By: Aleksandar Gilbert •Breaking News
DeFiance Capital said it has been “materially affected” by the liquidation of Three Arrows Capital in a statement released Friday. The investment firm sought to distance founder Arthur Cheong from the failed $10B crypto hedge fund.
“Arthur Cheong is committed to taking all necessary steps to protect, preserve and recover all assets which are and were owned in the context of DC’s business,” the statement read.
A court in the British Virgin islands placed Three Arrows into liquidation at the end of June. The fund, which championed the idea of a “super-cycle” that would make Bitcoin and other digital tokens worth millions of dollars, suffered heavy losses from the collapse of the Terra network in May.
DeFiance Capital sought to distance Cheong from Three Arrows co-founders Kyle Davies and Su Zhu, emphasizing that Cheong had never managed Three Arrows or any of its affiliate companies.
“Arthur Cheong has had no access to and consequently no visibility on 3AC’s financial statements and/or financial condition and only became aware of 3AC’s solvency problems around the time the news became public in mid-June 2022,” the statement reads.
None of DeFiance’s assets under management “were raised from 3AC, its founders, or any of its affiliates,” according to the statement.
Founded in 2020, DeFiance is a crypto investment firm that focuses on decentralized finance and GameFi. It backs dYdX, Aave and Lido, among other projects, according to its website.