3AC co-founders ‘shamelessly’ refuse to comply with subpoena, liquidators say

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The founders of collapsed digital asset hedge fund Three Arrows Capital (3AC) have refused to comply with a subpoena while “shamelessly” posting on social media and trying to raise money to build a new exchange, liquidators have claimed in the latest court filing.

The liquidators’ motion to issue a subpoena to the two founders was approved last December. They then issued the subpoenas to Kyle Davies and Su Zhu in early January over Twitter. They also claim to have pursued other means to provide the subpoenas, but Zhu and Davies have failed to comply.

@zhusu and @KyleLDavies jpg copies of orders made by the Supreme Court of Singapore against Mr Zhu, Mr Davies and Three Arrows Capital Pte. Ltd. are attached to this tweet by way of service. An unredacted copy of the order was served via email and can be provided upon request. pic.twitter.com/NVFd3pUhi3

— 3ACLiquidation (@3ACLiq) January 5, 2023

“Since the commencement of this proceeding, the [liquidators] have been pursuing their investigation with urgency and by all lawful means available to them. The Founders, however, have refused to meaningfully engage,” the liquidators claim in the lawsuit, filed at the Bankruptcy Court for the Southern District of New York.

They also said that the two founders have frustrated their efforts to gain information about 3AC. To date, the two have only offered “selective and piecemeal disclosures and have intentionally disrupted the [liquidators] attempts to communicate.”

While they have been unavailable to the liquidators, the two have been on various media outlets discussing their company and other market events, including the collapse of FTX. This includes a CNBC interview last November for Davies.

And while they have ignored the subpoenas issued over Twitter, they have been active on social media defending themselves.

“Shamelessly, while ducking his obligations to his failed company, Mr. Davies has been recently active in an effort to raise tens of millions to start a new crypto exchange called ‘GTX,’” the lawsuit added.

GTX is an exchange that Davies and Zhu have reportedly been working on. The two teamed up with Sudhu Armugan and Mark Lamb, the founders of CoinFLEX, an exchange that filed for restructuring in 2022 after being allegedly wrecked by Roger Ver.

According to disgraced ex-BitMEX CEO Arthur Hayes, GTX has already raised $25 million.

The liquidators are seeking to have the court compel Davies and Zhu to comply with the full terms of the subpoena by March 16.

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