3AC Liquidators Claims Founders are Withholding Information
- Liquidators have accused both 3AC co-founders of not cooperating with the proceedings.
- If the petition, which was submitted on Wednesday, is granted by the court, Davies will be obligated to comply with the subpoena by March 16.
- 3AC was one of the companies affected by the Terra collapse in May 2022.
According to a recent court filing, the liquidators in charge of managing the bankruptcy proceedings for the cryptocurrency hedge firm Three Arrows Capital have requested that the judge order co-founder Kyle Davies to cooperate with the proceedings.
The group accused Davies of withholding “information in his possession that is essential to accessing and controlling certain of the debtor’s digital assets.” According to the liquidators, 3AC co-founders Davis and Zhu4 “have failed to offer forthright cooperation to the Foreign Representatives, and in doing so have failed to fulfill their fiduciary duties owed to the Three Arrows estate.”
The liquidators and 3AC co-founders haven’t seen eye-to-eye since the proceedings began. They requested authorization from the judge to subpoena the co-founders in October. However, the co-founders missed the January 26 deadline given by the court.
In their letter, the liquidators expressed concern with Davies and Zhu’s media presence and use of social media. According to the liquidator’s filing,
Since January 5, 2023, Mr. Davies has been active on social media, having ‘tweeted’ or ‘retweeted’ dozens of times on Twitter. Shamelessly, while ducking his obligations to his failed company, Mr. Davies has been recently active in an effort to raise tens of millions of dollars to start a new crypto exchange called ‘GTX.’
According to reports, Davis and Zhu collaborated with Mark Lamb and Sudhu Armugan of CoinFLEX to raise $25 million to start a new cryptocurrency exchange. The plans to launch a new company come months after 3AC filed for bankruptcy due to its exposure to Terra.
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