The co-founders of collapsed crypto hedge fund Three Arrows Capital (3AC) have pledged to donate a portion of earnings from their newest crypto venture to creditors who lost money in the fund’s 2022 collapse.
In a July 3 Twitter Space, 3AC co-founder Kyle Davies said it would be “good karma” to “donate” the potential earnings from Open Exchange (OPNX) to 3AC’s creditors.
Davies described the proposed payback scheme as a “shadow recovery process,” which would be independent of the official liquidation process currently being managed by global consulting firm Teneo.
Touting the process as the “first” of its kind, Davies claimed it would allow himself and Su to donate funds to 3AC creditors, but only if they were “early and supporting” of OPNX.
He claimed there are already a “number of creditors” that have been made whole. “If there are some that don’t want to deal with us, then they don’t have to,” he added.
3AC filed for Chapter 15 bankruptcy protection on July 1, 2022, with subsequent court documents revealing that the collapsed fund owes some $2.8 billion to more than 20 different firms.
The pair’s location remains unconfirmed, with liquidators even forced to serve them with subpoenas through Twitter on Jan. 5 due to difficulties tracking them down. A recent New York Times report claims that Davies and Su had been spending the majority of their time surfing in Bali.
Most recently, on June 27, liquidators announced they are seeking to recover a total of $1.3 billion in lost funds from Davies and personally.