• U.S. bankruptcy court ruled the crypto hedge fund liquidators’ service of a subpoena to Kyle Davies via Twitter complied with due process
• Kyle Davies and Su Zhu have been accused of refusing to engage in proceedings for the hedge fund’s bankruptcy
• They have been ordered to appear in court in the British Virgin Islands on May 22
Three Arrows Capital Subpoena
The U.S. bankruptcy court has ruled that Three Arrows Capital (3AC) founder Kyle Davies must respond to a subpoena pertaining to the books and records of the bankrupt hedge fund within two weeks. The crypto hedge fund liquidators had served a court-approved subpoena to Davies via Twitter, which the court deemed as compliant with due process.
Accusations Against Davies & Zhu
Davies and fellow 3AC co-founder Su Zhu have been accused of refusing to cooperate with proceedings for the firm’s bankruptcy, violating their duties owed to Three Arrows. The two have allegedly made only “selective and piecemeal disclosures” related to bankruptcy proceedings.
Court Appearance Ordered
In addition, they have both been ordered by the court to appear in person at a hearing on May 22nd in the British Virgin Islands, or risk being found in contempt of court for failing to comply with this demand.
Background Of Three Arrows Capital Collapse
The collapse of 3AC occurred last June when its bullish trading strategy suffered from losses alongside a bear market for cryptocurrencies, resulting in $3 billion liabilities against $1 billion assets. This implosion was followed by similar failures from other firms exposed to 3AC such as Voyager Digital, Celsius Network, and Genesis Asia Pacific (a division of Genesis Global).
Conclusion
Overall, Kyle Davies has been given two weeks by U.S. bankruptcy court to respond under penalty of contempt regarding his involvement with Three Arrows Capital’s financial records following its collapse last summer. In addition, he and fellow 3AC co-founder Su Zhu have both been ordered by the court to appear at a hearing on May 22nd in the British Virgin Islands or face further repercussions from their lack of cooperation related to bankruptcy proceedings thus far.