Pledge

Future

Celsius

Davies

Teneo

Co-founders of bankrupt crypto hedge fund Three Arrows Capital (3AC) plan to donate their future earnings from their new venture to creditors who lost money after 3AC went bankrupt last year.&nbsp; 
The pledge was made during a Twitter Spaces event held on the 3rd of July, with co-founder Kyle Davis calling the effort a “shadow recovery process.”&nbsp; Donating For Karma&nbsp; 
According to Davis, co-founder of Three Arrows Capital, it would be good karma to donate potential earnings from their new venture, Open Exchange (OPNX), to creditors of the bankrupt hedge fund. The plan would be separate from the already ongoing liquidation proceedings that are currently underway and trying to recover any value from the bankrupt company and redistribute it amongst its creditors. Davis also claimed that some creditors of 3AC had already been made whole. Global consulting firm Teneo is managing the recovery process.&nbsp; 
Davis called the process the first of its kind, claiming that it would allow himself and another co-founder Su Zhu to donate funds to creditors, but only if they were supportive of their new venture, Open Exchange. Davis stated,&nbsp; 
“If there are some that don’t want to deal with us, then they don’t have to. We very much believe that if we do good and we say to creditors who lost money, they have a way to make more back. If we do bad and they do well, then that’s great. And that’s good karma, or whatever you want to call it.”&nbsp; 
When asked how he could be working on a new venture while Three Arrows Capital was still dealing with the liquidation process, Davies stated that there was a connection between the new venture and Three Arrows Capital creditors, who only stood to benefit from their new entrepreneurial endeavor.&nbsp; Crypto Community Unimpressed&nbsp; 
The comments were not well received by the larger crypto community, which is still reeling from the collapse and counting its losses. A spokesperson for the Three Arrows Capital liquidator, Teneo, stated in response to Davies’ comments,&nbsp; 
“The founders of Three Arrows have willfully ignored multiple requests to assist with this process after initiating the liquidation themselves, and the court records paint a clear picture of the ways in which they have hindered creditor recoveries. Instead of promising creditors future earnings from a nascent venture, we would recommend that the founders engage in the court-ordered activities already underway.” The Controversial Open Exchange&nbsp; 
Davies and Su are currently working on OPNX and came under heavy criticism from the crypto community, who criticized them for coming up with a new venture while shirking their responsibilities to the creditors of 3AC. The Open Exchange is a trading platform that allows the trade of bankruptcy claims. The exchange has claimed on its website that there are currently 20 million users, with about $20 billion in claims.&nbsp; 
This comes after several other major players, such as FTX and Celsius, have filed for Chapter 11 bankruptcy protection after the rout in crypto. Davies claimed in the Spaces session that OPNX is currently seeing around $50 million in daily trading volume. So far, only claims from Celsius are tradeable on the platform. However, the website states that claims in the bankruptcies of Voyager, Genesis, BlockFi, FTX, Hodlnaut, Vauld, Zipmex, Mt. Gox, and even Three Arrows Capital would be added soon.&nbsp; The 3AC Bankruptcy&nbsp; 
Three Arrows Capital filed for Chapter 15 bankruptcy protection on the 1st of July, 2022. Court documents later revealed that the collapsed hedge fund owed around $2.8 billion to over 20 different firms. Both Davies and Su’s locations remain unknown, with creditors forced to use Twitter to serve them subpoenas. A report in the New York Times has claimed that both have been spending most of their time in Bali. On the 27th of June, creditors stated that they were looking to recover around $1.3 billion in lost funds from Davies. 
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

3AC Founders Pledge To Donate Future OPNX Earnings To Creditors

Crypto Daily™

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