Davies said that after the 3AC bankruptcy, the three co-founders are working on ways to add value and guide the next Three Arrows on how to do things better.
By Bhushan Akolkar
Edited by Julia Sakovich
Updated
3 mins read
During an episode of the Unchained Podcast on March 19, Kyle Davies, the co-founder of the now-defunct Three Arrows Capital (3AC), expressed his lack of remorse regarding the crypto hedge fund’s bankruptcy.
“Am I sorry for a company going bankrupt? No, like companies go bankrupt, almost every company goes bankrupt, right? It’s how you build or what you do about it. We’re definitely trying our best. We can add value in various ways. At a minimum, we can even tell the next Three Arrows how to do things better when they go bankrupt,” he said.
In 2012, Kyle Davies and Su Zhu co-founded Three Arrows Capital (3AC), but faced significant losses during the mid-2022 crypto market downturn. As a result, 3AC underwent insolvency proceedings starting in the British Virgin Islands, which extended to Singapore and the US.
In September 2023, Singapore’s central bank imposed a nine-year ban on the founders of 3AC, forbidding them from engaging in the country’s regulated financial services sector. Additionally, in December 2023, a global court order originating from a court in the British Virgin Islands froze over $1 billion in assets owned by the founders of 3AC.
In September 2023, Su Zhu was arrested at the Singapore airport for allegedly failing to assist in the liquidation of 3AC and was sentenced to four months’ imprisonment. However, he was released early in December 2023 due to standard provisions for good behavior.
Davies clarified that neither he nor Zhu were aware of a court date, otherwise, Zhu would not have entered Singapore. He explained that their lack of awareness led to a contempt of court situation, resulting in Zhu’s apprehension. “Maybe we should (sack our lawyers for not informing us about the court date),” said Davis in responding to whether he has sacked his lawyer.
Davies, who relinquished his US citizenship to obtain Singapore citizenship, has yet to return to Singapore to serve the same four-month sentence that Zhu served. Davies mentioned that he wouldn’t be returning to Singapore “immediately”, but indicated that such matters typically get resolved over time through settlements.
In the interview, Davies also mentioned that he didn’t see any obstacles preventing his return to the US, where his family resides. However, he admitted that he hadn’t gone back to the US yet. He stated he was currently “in Europe” but did not confirm whether he was specifically in Portugal.
In April 2023, while in Dubai, the founders of 3AC established OPNX, a platform for exchanging bankruptcy claims. However, within a month, OPNX faced an official reprimand from Dubai’s crypto regulator for its operation as an unregulated exchange. By February 2024, the exchange was forced to cease its operations.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
