The collapse of 3AC: Zhu Su's risk management advice as an unheeded warning

The story of Three Arrows Capital is a cautionary example of the dangers of lack of caution in the crypto sector. Months before the company’s spectacular collapse in 2022, co-founder Zhu Su spoke clearly on risk management in a podcast appearance in February 2021 – an irony that makes the subsequent development all the more dramatic.

The prophetic words

Zhu Su warned at the time about the danger of being “blown away” in a crypto supercycle. His message was clear: investors should beware of overconfidence and not try to time the market. At the same time, he made a bold prediction for Bitcoin – he considered a potential valuation between 50 and 100 trillion US dollars possible, which would correspond to a coin price of about $2.5 million.

The tragic scenario

Ironically, Three Arrows Capital followed exactly the opposite of this wise advice. Shortly after Zhu Su’s public warnings about caution, the company itself fell into chaos. The spectacular collapse of the hedge fund platform left liabilities of $3.5 billion – an unprecedented disaster in the crypto industry.

Lessons and consequences

The subsequent arrest of Zhu Su underscores how important the lessons learned from this period are. The contrast between his earlier risk management appeal and the company’s actual behavior highlights a core problem in the crypto scene: the gap between words and actions, between theory and practice. This episode remains a lesson on compliance, loss of control, and the fatal consequences when major market participants ignore their own rules.