3AC Founder Kyle Davies Dodged Subpoenas, “Shamelessly” Promoting New Venture: Filing
Kyle Davies, the co-founder of the bankrupt crypto hedge fund 3AC, reportedly refused to comply with a subpoena approved by the court, according to a new filing on behalf of 3AC liquidators. While refusing to comply with the subpoena, co-founders Davies and Su Zhu were actively trying to raise funds for a new crypto venture known as “GTX.”
3AC Co-Founder Showed “No Compliance Whatsoever,” Liquidators Say
Three Arrows Capital (3AC) co-founder Kyle Davies stonewalled an investigation into the collapsed crypto hedge fund as he refused to abide by a court subpoena for the books and records of 3AC, according to a filing with the New York court. In the meantime, Davies “shamelessly” promoted his new crypto ventures, said the filing on behalf of 3AC liquidators Russell Crumpler and Christopher Farmer.
The filing added that Davies, and co-founder Su Zhu, did not “meaningfully engage” and “have made only selective and piecemeal disclosures” about 3AC. Their unwillingness to cooperate with liquidators “violates their duties owed to Three Arrows,” the filing noted.
It also said that Farmer and Crumpler tried to serve a court-approved subpoena to Davies through Twitter earlier this month, but the 3AC co-founder ignored their attempts. Davies hasn’t even attempted to contact the liquidators to voice his concerns about the subpoena, the filing said, adding that Davies remained active on Twitter amid their efforts to serve a subpoena.
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Davies and Zhu “Shamelessly” Attempted to Secure Funds for New Crypto Venture
Meanwhile, while refusing to cooperate with liquidators, Davies has been actively making efforts to raise capital for a new crypto exchange named “GTX,” the document added. Recent reports suggested that Davies and Zhu were in talks to secure $25 million in funding to launch their new venture in collaboration with CoinFLEX co-founders Mark Lamb and Sudhu Arumugam.
The liquidators are expected to try and force Davies to comply with the subpoena, with their request due to being considered during the next hearing scheduled for March 2, 2023. Earlier this month, Davies denied claims that he and his co-founder were not cooperating, saying he had been “contactable the entire time.”
3AC collapsed in June 2022 amid a severe crypto market downturn, just a month after the implosion of TerraUSD and LUNA tokens. In the months ahead, companies with exposure to 3AC, including Celsius Network and Voyager Digital, among others, have also filed for bankruptcy protection.
Do you think the court will approve the liquidators’ request to force Davies into complying with the subpoena? Let us know in the comments below.