Cryptocurrencies
Three Arrows Liquidators Seek $1.3 Billion Over 2022 Luna Crash
- Luna crash contributed to implosion of Three Arrows hedge fund
- How much liquidators will recover from TerraForm is unknown
Do Kwon, co-founder of Terraform Labs.
Photographer: Woohae Cho/BloombergThis article is for subscribers only.
Liquidators for the failed cryptocurrency hedge fund, Three Arrows Capital, are seeking at least $1.3 billion from TerraForm Labs Pte., the bankrupt digital assets business co-founded by Do Kwon, for losses the fund suffered following the 2022 crash of his related TerraUSD and Luna tokens.
TerraForm induced Three Arrows to purchase Luna and TerraUSD by manipulating the market for these tokens “in a manner that artificially inflated the price for the assets” before they were wiped-out, the liquidators said in court papers. The crash not only wiped out Three Arrows’ investment in those tokens but caused substantial losses in its other holdings, they said.