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El Salvador's Bitcoin Revolution: Bukele's Re-Election

El Salvador’s Political Landscape: Bukele’s Re-Election and Bitcoin Integration The recent re-election of President Nayib Bukele of El Salvador marks a pivotal moment in the nation’s political and economic journey. With an overwhelming 85% of the vote according to exit polls, Bukele’s victory not only underscores his popularity but also reflects a broader endorsement of his controversial policies—particularly his bold embrace of Bitcoin as legal tender. This pioneering approach has positioned El Salvador at the forefront of cryptocurrency adoption on a global scale, despite facing international scrutiny. The Bukele Administration: A Brief Overview Since assuming office in 2019, Bukele has made significant strides in several key areas: Gang Violence Reduction: His administration has implemented strategies aimed at curbing the rampant gang violence that has plagued the country for years. Bitcoin Legalization: In September 2021, El Salvador made history by becoming the first

$1.4 Billion Frozen: Controversial Freezing Order in Three Arrows Capital Liquidation

s into a sharp decline earlier this year. The freezing of approximately $1.4 billion worth of assets by Teneo, the firm handling the liquidation of crypto hedge fund Three Arrows Capital (3AC), has sparked further controversy and legal action. The freeze order prevents the co-founders of 3AC, Su Zhu and Kyle Davies, as well as Davies' wife, Kelly Chen, from accessing these funds. The freezing order has been sought in connection with claims made by the liquidators, alleging that the founders should be held responsible for the deterioration of 3AC's position, equivalent to the value of the freezing orders sought.

A Long and Intensive Effort

Teneo, the firm overseeing the liquidation of 3AC's assets, has described the process as a "long and intensive effort" to get Zhu and Davies to cooperate. The law firm has repeatedly asked a judge to order the co-founders to cooperate, claiming that they have been withholding information. Additionally, the co-founders have also faced pursuit from U.S. authorities. Davies announced in August that he renounced his American citizenship when he became a Singaporean resident in 2017, asserting that he does not have to answer to U.S. courts.

Allegations of Mismanagement

Teneo initially demanded a significant amount of money from the co-founders in June, following allegations that they continued taking on leverage in May and June 2022, despite the firm already being insolvent. A source familiar with the matter revealed that Teneo had met with 3AC's creditors and became aware of these allegations. The firm has since been able to secure some company assets, including $35.6 million in cash, a $30 million yacht, and some non-fungible tokens (NFTs). However, the value of these assets is far less than the $3.5 billion that is missing from 3AC's balance sheet.

Overexposure to Terra

Three Arrows Capital's downfall can be attributed to its overexposure to the algorithmic stablecoin protocol, Terra, which experienced a significant decline earlier this year. The firm's reliance on this protocol ultimately led to its insolvency and subsequent liquidation.

In Conclusion

The freezing of assets worth approximately $1.4 billion raises significant concerns over the management and operations of Three Arrows Capital. The ongoing legal action against the co-founders highlights allegations of mismanagement and the potential consequences they may face. As the liquidation process continues, it remains to be seen how these developments will impact the creditors and the overall cryptocurrency industry.


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