Industry players call on 3AC founders to acknowledge the company’s failures instead of tweeting about other failed crypto projects.
The United States Bankruptcy Court for the Southern District of New York has subpoenaed Three Arrows Capital co-founder Kyle Davies to file documents allowing access to 3AC assets.
Lawyers representing 3AC’s liquidators tagged co-founder Kyle Davies in a tweet containing a redacted copy of the summons, ordering the duo to hand over all physical and digital company documents by January 26, 2023.
Davies Subpoenaed Due to Constant Tweets
In addition to the documents, Davies is also required to provide the liquidators with the contact details of Zhu and several other entities. The document also demanded details of 3AC’s bank accounts and Ethereum addresses.
Davies’s frequent tweets in part led US bankruptcy judge Martin Glenn to rule in favor of the liquidators’ request to use social media to serve Davies with the subpoena. However, the judge clarified that the liquidators could not subpoena Zhu since he is not a citizen or resident of the United States.
Zhu and Davies have been playing cat-and-mouse with liquidators, after 3AC filed for bankruptcy in July 2022, when leveraged bets on rising cryptocurrency prices botched following the collapse of Terra Luna.
The company filed for Chapter 15 bankruptcy to protect its US assets, when the liquidation process began in 3AC’s legal domicile, the British Virgin Islands.
Crypto Industry Calls on 3AC Founders to Take Accountability
Although difficult to pin down, both founders were active on Twitter prior to the subpoena. Nic Carter, from Castle Island Ventures, commented on the irony of the founders being quoted on Twitter following recent tirades about other engaged crypto leaders.
Carter tweeted that “the irony of the 3AC boys trying to tweet their way back into respectability and having the court OK service via twitter as a result is really quite exquisite.”
The 3AC founders were responsible for several tweetstorms in recent months, surrounding alleged fiscal mismanagement at Digital Currency Group and FTX.
Both Zhu and Davies criticized Digital Currency Group and its CEO over liquidity problems at lender Genesis Global Capital, after the latter halted withdrawals and loan origination amid a liquidity crisis in mid-November 2022.
Genesis, along with Grayscale Investments, belongs to DCG. The criticism is ironic, as Three Arrows borrowed $2.4 billion from Genesis Asia Pacific, contributing to its cash crunch.
Zhu also tweeted a lot about the collapse of FTX, as well as the fall of its former CEO, Sam Bankman-Fried.
Noticeably absent from the duo’s tweets were any feelings of remorse or regret regarding 3AC’s collapse. There is also no mention of how creditors and investors would be repaid.
Matt Walsh, general partner at Castle Island, called Davies in mid-December. 2022 for over-tweeting without taking responsibility for 3AC’s mistakes.
The founders’ indifference was also highlighted by British Virgin Islands liquidators Teneo, whose recent court filing revealed that despite their constant tweeting and recent appearances on Bloomberg and CNBC, neither the founders nor their legal counsel responded to settlement correspondence.
By Audy Castaneda
