Explained: The Tai Ping Shan dispute between Arthur Hayes and 3AC

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—by Protos Staff
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BitMEX co-founder Arthur Hayes is upset with Three Arrows Capital (3AC) founders Su Zhu and Kyle Davies over rumors that the duo recently raised funds for their new exchange OPNX from Bahrain’s Sovereign Wealth Fund and were trading through Tai Ping Shan, also known as TPS Capital. 

Using profanity on Twitter, Hayes said he wants his money back immediately. This implyies that he — and many wealthy crypto investors — lost money in the 3AC bankruptcy.

Collections in that bankruptcy case have been delayed for months.

Hayes’ public disdain of Zhu and Davies goes back to July 2022, shortly after 3AC filed for bankruptcy, when he mocked an interview they did on Twitter. 3AC lost money when the once-$40 billion Terra LUNA ecosystem collapsed in May 2022. Its co-founders have admitted that they failed to even read the Terra whitepaper.

Read more: Low liquidity and Twitter suspension plagues newly launched OPNX

Last year, CoinDesk published an article indicating that 3AC once managed Tai Ping Shan Capital as an over-the-counter (OTC) trading desk. Indeed, TPS Capital once billed itself as “the official OTC desk of Three Arrows Capital.” 

For obvious reasons, it has subsequently attempted to distance itself from the hedge fund. However, TPS has still traded even while 3AC faced regulatory investigations and court-ordered liquidations.

Tai Ping Shan obscured in Singapore

The Singapore-registered entity of TPS Capital obscures its directors and other details about its legal ownership.

Registration documents filed in Singapore indicate that 3AC still owned a stake in Tai Ping Shan Capital. Three Lucky Charms LTD and TPS Research also owned equity stakes.

CoinDesk couldn’t find the identity of a third person besides Zhu and Davies who served as a 3AC principal, however the outlet noted the similarity between the names Three Arrows Capital and Three Lucky Charms.

What’s more, anonymous sources have indicated that 3AC and Tai Ping Shan were more closely tied than they wanted the public to believe — most of 3AC’s treasury was apparently held at Tai Ping Shan, they claim.

In July 2022, Singaporean authorities were still probing 3AC’s finances, which could have required a closer look at Tai Ping Shan. Those regulators would have had subpoena power to access information not otherwise available publicly.

It’s unclear where money sent to TPS is or where it went.

Read more: 3AC founders’ crypto exchange OPNX is another smokescreen

GTX, because G comes after F

In the midst of 3AC’s ongoing bankruptcy, failing to cooperate with liquidators, avoiding legal service, and ultimately failing to repay any creditors to date, Zhu and Davies have somehow managed to raise millions of dollars for a new crypto exchange.

Originally called GTX because, according to the official pitch deck, “G comes after F,” the thankfully renamed OPNX has — against all odds — opened for trading.

It’s having a rough start. Unsurprisingly, very few users are willing to deposit much capital with OPNX — resulting in minimal liquidity. The exchange has also experienced a Twitter suspension.

OPNX allows trading of bankruptcy claims — yes, including claims on 3AC — which has infuriated customers. It also has issued its own token.

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