Three Arrows Capital Co-Founder Kyle Davies Denies Pending Lawsuits Or Regulatory Action Against Him

Kyle Davies, one of the founders of the now-bankrupt Singapore-based crypto hedge fund Three Arrows Capital (3AC), has denied that there are pending lawsuits or regulations against him presently.

Davies, in a recent interview with a crypto news outlet, claimed that people are not angry at him but at the reality that the market went down.

"If you think about it, why are people angry? It has nothing to do with me actually," Davies said, adding that "they're angry that the market went down. In terms of us, we have no regulatory action anywhere, no lawsuits at all."

"There's just nothing, so I know they're clearly not mad at anything. They're mad because the supercycle didn't happen, maybe, I don't know. Something like that," he further said.

Although the crypto executive acknowledged people's anger surrounding the collapse of the crypto hedge fund he co-founded, he confirmed that the legal and regulatory heat mounting against Three Arrows Capital and its executives has subsided over time.

It may be recalled that Three Arrows Capital was one of the major casualties in the cryptocurrency sector in 2022 after the Terra ecosystem spectacularly imploded in May of that year. The crypto hedge fund, in the wake of the Terra implosion, or a couple of months after, filed for bankruptcy.

In October 2022, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) were reportedly probing the Singapore-based crypto business for allegedly misleading investors about its balance sheet.

In December 2022, the crypto hedge fund was believed to have over $3 billion in liabilities against just $1 billion worth of assets.

In January 2023, the U.S. Bankruptcy Court in the Southern District of New York took advantage of the advancement in technology and issued subpoenas to 3AC founders Davies and Zhu Su on Twitter.

The subpoenas, which compelled the founders to "produce documents, information, or objects or to permit inspection of premises in a bankruptcy case," were released after 3AC liquidators obtained permission from Singapore and U.S. courts.

The subpoenas also demanded several other things, including the founders providing "all documents available to you regardless of whether this information is possessed directly by you, your agents, representatives, employees, or investigators; or by any other legal or non-legal entities controlled by or in any manner presently or precisely affiliated with you."

Last month, Zhu Su and Davies partnered with the founder of the crypto exchange CoinFlex to launch Open Exchange (OPNX).

The new project is a crypto trading platform that will serve as a public marketplace for crypto claims and derivatives.

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