Three Arrows Capital’s CEO clarified why his company received nearly $400 million worth of ETH shortly after abandoning the asset.
Around $400 million worth of Ether (ETH) was transferred from cryptocurrency exchanges FTX, Binance, and Coinbase to the wallets belonging to hedge fund Three Arrows Capital (3AC). This was enough to spark off rumors about a potential security breach.
The Chinese crypto-journalist Colin Wu revealed the transfer of 91,477 ETH in two days to the Zhu Su-led Three Arrows Capital marked wallets. The funds are worth nearly $400 million.
Confirmation on the Funds
As the development gained traction, Su Zhu, who happens to be the Chief Executive Officer of 3AC, took it to Twitter to explain the entire incident. In actuality, the transfers are from Layer 1 to Layer 2. The exec revealed that more Ethereum funds will be transferred to the wallets in question in the coming days.
In his clarification post, Zhu also claimed that Ethereum layer 1 is still “unusable” for the new market players
Look I couldn't let you guys jerk off watching the burn without me
Eth L1 still unusable for newcomers, show it to your grandma if you don't believe me
I'll still bid it hard on any panic dump like this weekend obv
100k eth is dust fwiw, more coming— Zhu Su 🔺 (@zhusu) December 7, 2021
Su Zhu Abandoning Ethereum (ETH)
The news comes a few weeks after Su Zhu tweeted that he has “abandoned Ethereum despite supporting it in the past,” referring to the apparent scalability issues that still plague its network.
The exec stirred up controversy after criticizing Ethereum’s culture, saying that it suffers significantly from the “Founders’ Dilemma” and even went on to add that “everyone is already far too rich to remember what they originally set out to do.”
Hours later, Zhu backtracked on his original comments and said that “abandon” was the wrong word choice. After apologizing, the long-time ETH supporter and a Web3 juggernaut went on to talk about the teams working together to scale Ethereum on Layer 2.
While talking about the new users looking for viable alternatives due to high gas fees, Zhu said they shouldn’t be “shamed” for doing so and neither the developers who are working on these rival platforms.
The clash erupted following a tweet from Synthetix’s creator Kain Warwick where he claimed that “people he respected” had allegedly sold out in a bid to maximize their profits and added that they will come back to Ethereum when the scaling of Layer 2 becomes “inevitable.” Zhu lashed out and said he “chose the worst scaling solution” to defend his own “ETH bags.”
Besides, Three Arrows Capital also became an investor in Ethereum competitor, Avalanche’s mammoth called ‘Blizzard,’ to bring in developers focused on decentralized finance (DeFi), enterprise applications, non-fungible tokens (NFTs), and culture in November.