Feb 8, 2023
Three Arrows’ Davies Castigated for Ignoring Subpoena Via Twitter
(Bloomberg) -- Kyle L. Davies, co-founder of collapsed crypto hedge fund Three Arrows Capital, has allegedly persisted in refusing to cooperate with liquidators of the bankrupt firm’s estate after being served with a subpoena on Twitter last month, a US court filing showed.
Liquidators for Three Arrows said Davies had failed to comply with an order to cooperate with the estate by a January deadline, and moved to request a new order forcing him to comply by March 16.
After he was served with the subpoena on Jan. 5, Davies continued to post on his Twitter account, “openly ignoring the Court’s directives and enjoying media attention while he continues to thwart efforts” to gain access to documents and information on the case, the liquidators said in a Feb. 7 filing with the US Bankruptcy Court for the Southern District of New York.
A series of spectacularly ill-advised crypto bets saw Three Arrows shut down in June last year, with Davies and his co-founder Su Zhu quickly moving into hiding while the firm filed for bankruptcy proceedings in New York and in the British Virgin Islands. Three Arrows owes around $3 billion to its creditors.
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Davies didn’t immediately return a request for comment on the filing.
“He is, without question, aware of the Subpoena — having been tagged in 41 replies and 64 retweets — and has, once again, chosen to ignore his duties to Three Arrows,” the liquidators said, submitting evidence to the court of Davies’ posts on Twitter and media articles quoting him.
Russell Crumpler and Christopher Farmer, two of the estate’s representatives, said in the filing that a recent effort by Davies and Zhu to raise tens of millions of dollars for a new crypto exchange was further evidence of his avoidance of his fiduciary duties to the firm.
“This is not a question of partial compliance, but of no compliance whatsoever,” they added.
--With assistance from Jeremy Hill.
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