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The co-founders of failed cryptocurrency hedge fund Three Arrows Capital (3AC) have pledged to donate some of the proceeds from their newest crypto venture to creditors who lost money in the fund’s 2022 collapse.
On Twitter Space on July 3, 3AC co-founder Kyle Davis said it would be “good karma” to “donate” potential Open Exchange (OPNX) earnings to 3AC’s creditors.
— Mario Nawfal (@MarioNawfal) July 3, 2023
Davis described the proposed payback scheme as a “shadow recovery process” that would be independent of the formal liquidation process currently run by global consulting firm Teneo.
Touting the process as “the first” of its kind, Davis stated that he would allow him and Su to donate funds to 3AC’s creditors, but only if they were “earlier and supportive” of OPNX.
He said that there are already “a number of creditors” who have been acquitted. “If there are those who do not want to deal with us, then they do not need it,” he added.
“We strongly believe that if we do good and tell creditors who have lost money, they have a way to get more back. If we do bad things and they do well, then that’s great. And that’s good karma, or whatever you want to call it.”
When Davis was asked how he could work on a new venture while his bankrupt hedge fund was still in liquidation, Davis stated that lenders would only “benefit” from the new company.
OPNX is shrouded in controversy
Davis and Su caused controversy when they announced the launch of OPNX on April 4, with some members of the cryptocurrency community criticizing the pair for coming up with a new venture while apparently shirking their responsibilities due to the collapse of their hedge fund. .
3AC is dead, long live 3AC Ventures https://t.co/61s8uQquOZ
— Kyle Davies (@KyleLDavies) June 21, 2023
3AC filed for Chapter 15 bankruptcy protection on July 1, 2022, and subsequent court documents showed that the bankrupt fund owed about $2.8 billion to more than 20 different firms.
The couple’s whereabouts remain unconfirmed, and liquidators were even forced to serve subpoenas on them via Twitter on Jan. 5 due to difficulty tracking them. A recent New York Times report claims that Davis and Su spent much of their time surfing in Bali.
Most recently, on June 27, the liquidators announced that they were seeking to recover a total of $1.3 billion in lost funds from Davis and personally.