“Trading crypto aggressively is one of the most fragile financial acts one can take. I’ve learned the hard way, as have many others this past cycle.” — Su Zhu

“Remember, when Bitcoin recovers, it originally recovers 5x to 8x of where it was, or even more.” — Alex Mashinsky

Biography:

Su Zhu is the former CEO and chief investment officer of now-bankrupt Three Arrows Capital. 3AC was the biggest crypto hedge fund of its time and was founded by Zhu in 2012 along with Kyle Davies, a former high-school classmate. The two co-founders, who are currently on the run from the authorities, began their partnership at the kitchen table of their shared apartment in Singapore, turned the hedge fund into a $10 billion firm and eventually led to its downfall in 2022. 

Alex Mashinsky is an American tech entrepreneur and founder of eight companies, including Nasdaq-listed telecom firm Arbinet and Transit Wireless. He is widely known as the founder of the now-bankrupt cryptocurrency firm Celsius Network, which offered crypto lending and staking services. Nicknamed “The Machine,” the tech executive has had a successful career in technology, holding 50 patents related to aspects of the tech behind platforms like Netflix’s video streaming and Twitter. Mashinsky has claimed he tried to create electronic money four years before Satoshi Nakamoto published the Bitcoin white paper.

Zhu and Mashinsky’s 2022:

2022 wasn’t the best year for both Zhu and Mashinsky — just like for many other crypto CEOs — with both stepping down from their respective roles as their companies disintegrated after the collapse of the Terra ecosystem.

For Zhu, 2022 marked the end of a legacy he had been building for a decade. What seemed like unavoidable turmoil brought upon by the collapse of the Terra ecosystem turned out to be a series of mismanagements and bad market bets. The hedge fund borrowed money from over 20 major institutions and engaged in a series of significant directional transactions in Grayscale Bitcoin Trust, LUNA and stETH. The May cryptocurrency crisis caused a succession of spiraling investment losses for the hedge fund. The company went out of business, and the loan defaults spread like wildfire in the cryptocurrency market, leading to the bankruptcy of nearly half a dozen crypto lenders.

Meanwhile, Mashinsky’s Celsius filed for Chapter 11 bankruptcy in July after the firm stopped withdrawals due to its inability to pay back its customers, with a balance sheet gap of nearly $2.85 billion. The major problems for the firm began with the depeg of stETH via Lido, which the firm used prominently for its Earn program. Mashinsky subsequently resigned from Celsius in September, citing the increasing distraction caused by his serving as CEO. Some sources suggested Mashinsky had personally managed crypto trades months before Celsius’ bankruptcy. Further reports alleged that Mashinsky withdrew $10 million from Сelsius before freezing customer accounts. In December, a federal United States bankruptcy judge ordered Celsius to return crypto worth around $44 million to its customers.

Zhu and Mashinsky’s 2023:

Zhu’s 2023 could become more complex due to an ongoing probe from United States financial regulators. In early January, Zhu and Davies were subpoenaed via Twitter due to their unavailability via regular communication channels. Zhu has tried to deflect the collapse of 3AC onto collapsed crypto exchange FTX, claiming FTX and its sister company, Alameda Research, were the main culprits in manipulating the markets.

In the meantime, Mashinsky was slapped with a lawsuit in early January accusing the CEO of numerous “false and misleading statements” that led to investors losing billions. The civil lawsuit was filed by New York Attorney General Letitia James, alleging that he defrauded more than 26,000 investors in the U.S. state.

Zhu and Mashinski made it onto Cointelegraph’s Top 100 last year owing to the success of their firms — but this time around, they are on the list for the exact opposite reasons. As of early 2023, the former 3AC CEO is on the run from authorities, while Mashinski is free to roam the streets, despite some calls for him to be placed in jail.