The co-founders of collapsed crypto hedge fund Three Arrows Capital (3AC) have pledged to donate a portion of earnings from their newest crypto venture to creditors who lost money in the fund’s 2022 collapse.
In a July 3 Twitter Space, 3AC co-founder Kyle Davies said it would be “good karma” to “donate” the potential earnings from Open Exchange (OPNX) to 3AC’s creditors.
https://t.co/BLA0u9ZoAJ
— Mario Nawfal (@MarioNawfal) July 3, 2023
Davies described the proposed payback scheme as a “shadow recovery process,” which would be independent of the official liquidation process currently being managed by global consulting firm Teneo.
Touting the process as the “first” of its kind, Davies claimed it would allow himself and Su to donate funds to 3AC creditors, but only if they were “early and supporting” of OPNX.
He claimed there are already a “number of creditors” that have been made whole. “If there are some that don’t want to deal with us, then they don’t have to,” he added.
“We very much believe that if we do good and we say to creditors who lost money, they have a way to make more back. If we do bad and they do well, then that’s great. And that’s good karma, or whatever you want to call it.”
When pressed on how he could be working on a new venture while his now-bankrupt hedge fund was still in the midst of a liquidation process, Davies claimed that creditors only stand to “benefit” from the new company.
OPNX shrouded in controversy
Davies and Su courted controversy when they announced the launch of OPNX on April 4, with some members of the crypto community criticizing the pair for coming up with a new venture while seemingly shirking their responsibilities in relation 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, with subsequent court documents revealing that the collapsed fund owes some $2.8 billion to more than 20 different firms.
The pair’s location remains unconfirmed, with liquidators even forced to serve them with subpoenas through Twitter on Jan. 5 due to difficulties tracking them down. A recent New York Times report claims that Davies and Su had been spending the majority of their time surfing in Bali.
Most recently, on June 27, liquidators announced they are seeking to recover a total of $1.3 billion in lost funds from Davies and personally.
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