Timeline of the Decline
Early 2022
$18B AUM
All-Time High - Peak euphoria
May 2022
$Unknown
LUNA collapse wipes out leveraged positions
June 2022
$0
3AC liquidated, founders flee to Dubai
Current
$0
Post-collapse trading
What Went Wrong
-
Overleveraged LUNA Bet
3AC had massive leveraged exposure to LUNA and UST. When Terra collapsed, 3AC was underwater on billions in loans.
-
GBTC Arbitrage Collapse
3AC's GBTC premium arbitrage strategy became a loss when GBTC traded at a discount, locking up billions.
-
Uncollateralized Borrowing
3AC borrowed from multiple lenders simultaneously without proper collateral, leaving creditors with $3.5B+ in losses.