July 23, 2024
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3AC Co-founder Can Answer Subpoena or ‘take his chances’ — US Judge

Kyle Davies, co-founder of the insolvent crypto hedge firm Three Arrows Capital, has been ordered to respond to a subpoena filed in January or face being held in contempt of court.

After permission from a New York bankruptcy court, a subpoena was sent to Davies on January 5 via Twitter, asking him to deliver 3AC’s liquidators with documents such as seed phrases and private keys, as well as company communications and other company-related information, within 14 days.

After failing to hear from Davies, US Bankruptcy Judge Martin Glenn approved a motion to compel on March 22, saying that Davies may come and fight the claims presented by 3AC liquidators, “or he can fail to appear as he has done thus far, and, frankly, take his chances.”

A move to compel is a legal request asking the court to compel one party to give evidence to the party that filed the motion.

Individuals found in contempt of court during civil procedures are normally fined, but they can also be imprisoned. The goal of civil contempt is to induce compliance so that the severity of punishments can rise until the order is obeyed. Kyle Davies and fellow 3AC co-founder Su Zhu’s current location are unknown.

Davies’ most recent tweet, dated March 23, looks to be a snapshot of him in Bali. Yet, an earlier tweet from the same day shows him standing in Bahrain with Su Zhu and one other person.

Su Zhu did, however, publish a tweet with a familiar landmark in the backdrop on the same day, implying he is or was recently in Dubai. Davies has “decided to ignore his duties to Three Arrows,” according to lawyers for 3AC’s liquidators.

Meanwhile, 3AC has partnered with CoinFLEX to develop OPNX, a marketplace for buying and selling claims in crypto company bankruptcy proceedings.