Speculation has mounted that hedge fund Three Arrows Capital, also known as 3AC, is in trouble over losses associated with the recent collapse in Bitcoin, Ether, and other cryptocurrencies.
3AC, Zhu and fellow co-founder Kyle Davies are thought to be among the world’s biggest holders of crypto, with the fund managing over US$10bn at its peak, according to analytics firm Nansen.
Sparking the worries was a tweet from co-founder Su Zhu, seemingly out of the blue.
"We are in the process of communicating with relevant parties and fully committed to working this out," Zhu posted on Twitter.
The price of Bitcoin and Ether have dropped sharply in the past week and since hitting all-time highs in November, have plunged 69% and 77% respectively.
Mirroring fears at 3AC, the falls have prompted fears of margin calls for MicroStrategy, the world's largest Bitcoin holder.
As cryptocurrency prices continue to plummet, market sell-offs are squeezing liquidity from the market, with crypto lending firms figuring out how to repay lenders and other counter-parties.
3AC has suffered several setbacks in recent months, including liquidation of its projects including Avalanche, Polkadot, and Ether, which are all down 57%, 38.8%, and 47% respectively over the last 30 days.
This week, the digital currency sector took a massive beating after US crypto bank Celsius froze transfers and withdrawals, helping to ignite fears of contagion after terraUSD and luna tokens failed last month.