Three Arrows Capital (3AC) co-founders, Kyle Davies and Su Zhu, have announced their intention to donate a portion of their future earnings from their new crypto venture, Open Exchange (OPNX), to the creditors who suffered losses in 3AC’s collapse in 2022. Kyle Davies described this initiative as a “shadow recovery process,” separate from the ongoing official liquidation process managed by Teneo, a global consulting firm.
Davies emphasized that this approach would be the first of its kind, allowing him and Su Zhu to contribute funds to 3AC’s creditors, but only if they were early supporters of OPNX. He mentioned that several creditors have already been reimbursed, but those who choose not to engage with them will not be pressured to do so.
The co-founders believe that by doing good and offering creditors an opportunity to recover their losses, they can create positive karma. Davies defended the launch of OPNX despite ongoing liquidation proceedings, stating that creditors stand to benefit from the new company’s success.
However, the introduction of OPNX received criticism from some members of the crypto community who accused Davies and Su Zhu of neglecting their responsibilities regarding their collapsed hedge fund. The controversy surrounding the launch stems from the perception that they were avoiding accountability for the fund’s failure while engaging in a new venture.
On July 1, 2022, 3AC filed for Chapter 15 bankruptcy protection, revealing debts of approximately $2.8 billion owed to over 20 different firms. The whereabouts of Davies and Su Zhu remain unknown, with liquidators resorting to serving subpoenas through Twitter due to difficulties in locating them. Liquidators are currently seeking to recover $1.3 billion from Davies personally.
Despite the challenges and controversies surrounding 3AC’s collapse, the co-founders’ pledge to donate OPNX earnings to creditors offers a potential path towards recovery and redemption. The initiative demonstrates a commitment to ethical business practices within the cryptocurrency industry, aiming to restore trust and address the financial losses suffered by creditors.