Founders of Three Arrows Donate Future Proceeds to Creditors in the Spirit of “Karma”
Two founders of bankrupt crypto hedge fund Three Arrows Capital (3AC) will donate “future proceeds” to creditors who lost money after its implosion last year, one of them, Kyle Davies, said in a Mario essay on Monday moderated Twitter Spaces Nafwal.
Davies described the plan as a “shadow recovery process” outside of the ongoing liquidation proceedings, attempting to recover the value of the insolvent company and distribute it to creditors. In fact, some early creditors have already been exonerated, he said.
The failed hedge fund manager said he and his co-founders believed in “karma” and that any such additional donations would complement any recoveries through the formal process.
“The founders of Three Arrows intentionally ignored multiple requests for assistance in this process after initiating the liquidation themselves, and the court filings paint a clear picture of the way they obstructed recovery from creditors,” said a spokesman for Teneo. the 3AC liquidator said in an email to AskFX when asked to respond to Davies’ comments. “Instead of promising creditors future returns from an emerging company, we would recommend that founders engage in court-ordered activities already underway.”
The spokesman claimed.
“We have this process where we donate over time,” Davies said. “We strongly believe in the idea that if we do good, creditors who have lost money have an opportunity to get more back.”
Davies made these comments after being asked about the look he and Su were in Zhu, the other co-founder, worked on a new crypto exchange from the beaches of Bali while their previous company was in a liquidation process. He said there was a “connection” between their new venture and creditors who would actually benefit from their new entrepreneurial journey.
The two have launched a trading platform called the Open Exchange (OPNX) for trading bankruptcy claims. The exchange says there are 20 million users with $20 billion in claims after major players like Celsius Network and FTX filed for Chapter 11 protections amid the market crisis last year. The exchange, dubbed Open Exchange (OPNX), was announced in February, less than a year after the hedge fund imploded along with $2.5 billion in customer deposits.
“One of the things we really believe in is karma” and that it is “something bigger than all of us” gives. Davies said on Twitter Spaces.
When asked about OPNX’s progress in the Twitter Spaces, Davies said that “it’s a journey” and that they are currently seeing around $50 million in daily trading volume.
The shadow recovery process described by Davies does not involve a tokenized asset, he said. The founder did not respond to AskFX’s request for comment clarifying the mechanism at the time of publication.
Currently, only debts from lender Celsius are tradable on the platform, but debts from the bankruptcies of FTX, Genesis, BlockFi, Voyager, Hodlnaut, Mt Gox, Vauld, Zipmex and even Three Arrows Capital are “coming soon” according to its website.
