3AC Co-founders Enter the Memecoin Market With Controversial Launch
Su Zhu and Kyle Davies, former co-founders of the defunct hedge fund Three Arrows Capital (3AC), have sparked fresh controversy with their latest venture, a memecoin called Three Arrowz Capitel.
This token comes after the collapse of their previous hedge fund, which left billions in debt and a wake of disappointed creditors.
Despite their financial and legal troubles—including Su Zhu's arrest last year in Singapore for failing to comply with court orders—the pair continues to push forward with this new project.
A Trading-Focused Token Shrouded in Controversy
Branded intentionally with a misspelling of their infamous hedge fund, the launch of Three Arrowz Capitel has drawn scrutiny.
The co-founders, currently located in Taiwan and known for promoting through their official social media accounts, have begun to direct attention to a Telegram channel where the token is being actively discussed.
As of now, the Telegram channel for Three Arrowz Capitel has only 199 subscribers, likely including the co-founders and their inner circle.
However, there’s more to this token than meets the eye.
Blockchain analytics reveal that an overwhelming 84% of the token’s supply is held by insiders as of yesterday afternoon.
Most of this—71.8%—is locked in a "Team & Insider" wallet.
On top of that, the token is subject to a 1% tax on every transaction.
This tax, according to Zhu and Davies, is intended to help the community swap the token for other cryptocurrencies, referred to as "bags."
However, with such a significant portion of the supply held by insiders, many in the community are raising concerns about potential manipulation and unfair market practices.
Insiders Dominate Token Holdings, Raising Alarm
In addition to the primary wallet holding, another eight wallets connected to insiders also boast substantial allocations.
Combined, this brings insider control of the token to a staggering 84%.
As the token's structure becomes more transparent, criticism mounts over its concentrated ownership.
@0xLouisT, investment partner of LD1, wrote in an article on X (formerly Twitter),
“It should be clear that buying into this token means placing your trust in a small group of insiders who control over 84% of the supply. Some might even label it a cabal token. The choice is yours: decide if you want to play that game.”
As of Monday afternoon, insiders held up to 84% of the token’s supply.
The insider dominance has left the general public with very little access to the token, with only 9.3% of the supply available for trading on decentralised exchange Uniswap.
For those retail investors who have managed to get their hands on it, the past 24 hours have been brutal.
The token has lost over 20% of its value, continuing a sharp decline that began shortly after its launch.
Token Price Plummets Following a Classic Pump-and-Dump Pattern
The price of Three Arrowz Capitel has rapidly deteriorated.
From its all-time high of $0.192 on 28 September 2024, the token has plunged more than 70%, now trading slightly over $0.05.
Its chart tells a familiar story: a dramatic rise followed by a steep fall, commonly associated with pump-and-dump schemes.
Investors' hopes were high in the early hours of the token's release, with its market capitalisation briefly nearing $100 million, then surging to over $170 million.
The market capitalisation has now fallen to $46 million.
However, the current state of the token reflects the transient nature of such speculative projects, especially when ownership is so heavily weighted in favour of insiders.
Blockchain Analysis Reveals Shady Token Distribution
An analysis by BubbleMaps, a blockchain analytics firm, has highlighted the stark imbalance in token allocation.
According to their findings, more than 80% of the supply is held in just a few wallets, all linked to the core team.
This distribution pattern suggests that insiders may be leveraging the concentrated supply to inflate the token’s price artificially.
Investors are growing wary of what they see as price manipulation tactics.
Adding to the scepticism, @0xLouisT elaborated on the token’s pre-sale in his X’s article.
The partner disclosed that around 750 Ethereum (ETH) tokens were gathered from 25 investors during the pre-sale, while the remaining 336 ETH were distributed across eight insider wallets.
These wallets, according to the article, have the potential to see returns between ten to thirty times their initial investment.
Criticism Mounts as 3AC’s Founders Remain Unapologetic
The launch of Three Arrowz Capitel has reignited discussions about Su Zhu and Kyle Davies’ ethics in the cryptocurrency space.
Their hedge fund, 3AC, collapsed in July 2022 after failing to meet creditors' demands during a major market downturn.
Before its downfall, 3AC managed $10 billion in assets at its peak in 2021, but by April 2022, that figure had plummeted to $3 billion.
The hedge fund's failure resulted in billions of dollars in unpaid debts and widespread losses for investors.
Despite these past failures and ongoing legal battles—including a nine-year prohibition order from the Monetary Authority of Singapore issued on 14 September 2023—the duo remains defiant.
L-R: Kyle Davies and Su Zhu
Instead of addressing the fallout from their hedge fund’s collapse, they have chosen to pivot to new projects like Three Arrowz Capitel and their ill-fated OPNX cryptocurrency exchange, which shut down in 2023 after just a year in operation.
As criticism intensifies, it remains unclear how long the memecoin will sustain its value, or whether it will face regulatory scrutiny like 3AC before it.
For now, the project serves as another chapter in the tumultuous saga of Zhu and Davies, leaving many to question their true intentions in the crypto industry.
Weatherly
