From $3 billion to zero in just three days. This is not just a game of numbers, but a story full of ambition and loss of control, telling the biggest collapse in the cryptocurrency world - the fall of Su Zhu.

Su Zhu, a fledgling

Meet Su Zhu: a Singaporean entrepreneur and co-founder of Three Arrows Capital (3AC). Although he has a humble background - in 2012, he was just an ordinary trader at Deutsche Bank, but he is definitely not content with being ordinary. By 2021, Su Zhu has become a celebrity in the cryptocurrency world, and the name of Three Arrows Capital is well-known throughout the industry. His operation methods are bold and radical, just like the gambling god in the casino, daring to fight and fight, which makes many people worship him.

However, this seemingly rock-solid empire quietly collapsed in a gamble.

Borrowed success

Su Zhu's secret to success is simple - crazy borrowing. He made Three Arrows Capital almost a "borrowing machine", with funding sources ranging from BlockFi to Voyager to Genesis. As long as someone is willing to lend, he can borrow money. And the money he borrowed is basically used to borrow more money.

This sounds a bit crazy, and it is. Behind the seemingly glamorous operation is a highly fragile financial game. When leverage is used more and more, the final collapse is only a matter of time.

And there’s more to it than that — Su Zhu didn’t just lose control of his own risk management, he also accumulated a lot of trust and money in the industry. He controlled the money of wealthy people in the cryptocurrency field, the trust reserves of senior people in the industry, and the investment of other hedge funds. Yet, he talked about the so-called “super cycle” on social media while spending millions of dollars on rare NFTs that looked “cool”.

In everyone's eyes, Su Zhu's wealth looks like a solid pyramid. In fact, it is just an empty shell made of paper that may collapse at any time.

Crisis breaks out: LUNA collapses

In May 2022, things finally began to show signs of collapse. LUNA collapsed, and Three Arrows Capital's $500 million investment evaporated in an instant. Many people thought it was just a minor incident, but who knew it was just the beginning of a disaster.

The collapse of Bitcoin and other crypto assets completely destroyed Three Arrows Capital's leverage strategy. Imagine if you use $2 billion in crypto assets to borrow $1 billion, and when the value of your assets suddenly drops by half, your debt becomes an overwhelming boulder, and the only way out is bankruptcy.

At this time, creditors began to come to collect debts, shouting: "Where is our money?" But Su Zhu's response was to disappear without a trace. He was completely out of touch, as if he had evaporated from the face of the earth.

Bankruptcy and Escape

Three Arrows Capital eventually went bankrupt, leaving Su Zhu with a $3.5 billion debt gap, several cryptocurrency companies went bankrupt, and thousands of investors fell into nightmares. But what about Su Zhu? He didn't bow his head like a "loser". He ran to Dubai and continued to live a luxurious life.

Until September 2023, he was arrested on the spot when he tried to escape with a fake passport at Singapore Changi Airport. This time, he is no longer the king of the cryptocurrency empire, but a prisoner in Singapore, facing a sentence of up to 10 years. The $50 million mansion he lived in has been seized, the once priceless NFT has become worthless, and his reputation has been completely destroyed.

Lessons and reflections

After reading this story, everyone’s first reaction must be: "This guy is so unlucky." But in fact, Su Zhu’s failure was not due to bad luck, but his over-reliance on leverage and lack of risk management, which made everything fragile.

His rise to fame is like a tower of wealth built with playing cards, seemingly indestructible, but in fact vulnerable. Real wealth is never about how much you earn, but how much you can keep.

Therefore, everyone should remember one sentence: In the cryptocurrency market, leverage is like gravity, which can make you fly high or make you fall badly. And those successes that seem to come too easily are often the biggest danger signals.

The story ends here. Su Zhu’s legend has ended, and his failure has become a wake-up call for the market.