Cryptocurrency

3AC co-founder can answer subpoena or ‘take his chances’ — US judge

Conquistador
Conquistador
3 Min Read

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Kyle Davies, the co-founder of bankrupt crypto hedge fund Three Arrows Capital, has been ordered to answer the subpoena issued to him in January or risk being held in contempt of court.

The Jan. 5 subpoena was issued to Davies via Twitter following approval from a New York bankruptcy court, instructing him to provide 3AC’s liquidators with documents such as seed phrases and private keys as well as company communications and other company-related documents within 14 days.

After failing to hear from Davies, the United States Bankruptcy Judge Martin Glenn granted a motion to compel on March 22, noting that Davies can appear and contest the arguments made by 3AC liquidators, “or he can fail to appear as he has done so far, and, frankly, take his chances.”

A motion to compel is a legal request that the court will compel one party to provide evidence to the party that brought the motion.

People found to be in contempt of court during civil proceedings are usually hit with a fine, but may also be imprisoned. The purpose of civil contempt is to coerce compliance, so the severity of punishments can increase until the order is carried out.

Related: Do Kwon faces fraud charges from US prosecutors hours after arrest

The current whereabouts of both Kyle Davies and fellow 3AC co-founder Su Zhu remains unknown.

Davies’s most recent tweet, on March 23, appears to show a photograph of him in Bali. However, an earlier tweet from the same day shows him standing with Su Zhu and one other person in Bahrain.

Su Zhu also shared a tweet with a recognizable landmark in the background on the same day, however, suggesting he may be or have recently been in Dubai.

According to lawyers for 3AC’s liquidators, Davies has “chosen to ignore his duties to Three Arrows.”

Meanwhile, the pair from 3AC has teamed up with CoinFLEX to launch OPNX, a marketplace aimed at enabling claims in crypto firm bankruptcy proceedings to be bought and sold. 

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