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Hashed Lost $3B on Terra’s Meltdown, CEO Tells Bloomberg


Key Takeaways

  • Hashed lost more than $3 billion in paper gains on its LUNA bet, the firm’s CEO Simon Seojoon Kim has told Bloomberg.
  • The venture capital firm was one of several crypto giants to take a hard hit as Terra collapsed to zero in May.
  • Kim said the firm plans to focus increasingly on GameFi and will launch a new fund in the future.

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Though Hashed took a big hit on Terra, Kim said his belief in crypto hasn’t waned. 

Hashed CEO Confirmed LUNA Losses 

Hashed lost more than $3 billion on its Terra bet, according to a new report published in Bloomberg today. 

The venture capital firm’s CEO Simon Seojoon Kim revealed in a Wednesday interview that the firm bought 30 million LUNA in Terra early on and lost most of its investment as the network collapsed. LUNA peaked at a market value of about $119 in April, weeks before Terra’s UST stablecoin lost its peg to the dollar, leading to a spectacular implosion that erased about $40 billion of value in the space of a few days. Hashed’s 30 million tokens were worth about $3.6 billion at the peak. 

Kim told Bloomberg that “there’s no such thing as a portfolio that guarantees success, and [Hashed makes] investments with that in mind.” Hashed was one of several of the industry’s top players to take a battering in the fallout from Terra’s blowup, the most notable being Three Arrows Capital, the once-legendary crypto hedge fund co-run by Su Zhu and Kyle Davies. The now-bankrupt Three Arrows had an estimated $600 million worth of exposure to Terra and creditors claim the firm owes $2.8 billion to lenders like Voyager Digital, Celsius, and BlockFi after it defaulted on a series of uncollateralized, nine-figure loans.

After Terra’s collapse, local media accused Kim of endorsing LUNA online and selling part of his position before it collapsed, though he told Bloomberg that Hashed avoids making trade recommendations. Terra dominated crypto social media in the lead-up to its collapse, with Terraform Labs’ outspoken CEO Do Kwon regularly using Twitter to advertise the token to his army of supporters. Both Kwon and Terraform Labs are now facing multiple lawsuits on allegations of fraud and misleading investors, and the company’s staff have been banned from leaving South Korea. 

Hashed Turns to GameFi 

Kim told Bloomberg that Hashed is now looking to make more investments in the GameFi sector, doubling down on the thesis that more gaming companies could start to leverage blockchain technology to let players trade in-game tokens. Hashed previously backed The Sandbox and Axie Infinity’s Sky Mavis, two of the biggest players in GameFi today. 

Kim said in the interview that the emergence of GameFi titles within the Metaverse could create “a vast number of jobs as assets are exchanged between the virtual and real worlds.” Though it’s early days for the space, examples of GameFi-related jobs include those found in gaming guilds, where groups of gamers gather to exchange assets and earn revenue from play-to-earn games like Axie Infinity. 

Hashed raised $180 million to launch a new fund in December and has deployed around half of the capital to date. Once that’s used up, Kim said, the firm will spin up a new arm to continue investing in Web3.

Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies. 

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