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A motion to hold co-founder Kyle Davies of the defunct crypto hedge fund Three Arrows Capital (3AC) in contempt of court and impose sanctions has been denied by a judge overseeing the bankruptcy case. 
The ruling came from Judge Martin Glenn of the United States Bankruptcy Court for the Southern District of New York in an August 11 filing. 
The judge explained that previous rulings on motions related to a subpoena issued to Davies through X, formerly known as Twitter, were made under the assumption that Davies was a U.S. citizen. 
However, it was later revealed that Davies is a non-U.S. citizen residing outside the country. 
Judge Glenn cited federal laws that govern compelling compliance outside the United States. 
He emphasized that his earlier approvals of motions were based on the assumption that Davies held U.S. citizenship. 
This assumption was crucial for proper service of the subpoena, which was invalidated due to Davies’ non-U.S. citizenship status. 
Davies’ lawyers submitted evidence on August 1 indicating that he had applied to renounce his U.S. citizenship in December 2020 and had become a citizen of Singapore after marrying a Singaporean national. 
As Singapore does not permit dual nationality, Davies’ change in citizenship status had significant legal implications. 
The judge suggested that foreign representatives could explore the possibility of compelling Davies’ compliance through the Singaporean legal system. 
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Consequently, he dismissed the contempt motion, clarifying that the U.S. court lacked jurisdiction over Davies. 
Co-founder Su Zhu of 3AC, who is a Singaporean national and resides outside the United States, was also issued a summons via X. 
However, he is not subject to the subpoena due to his non-U.S. residency. 
The whereabouts of both Zhu and Davies have largely remained unknown since 3AC’s collapse in July 2022. 
Nonetheless, Davies’ lawyers confirmed his residence in Singapore in the August 1 filings. 
The liquidators overseeing 3AC’s case are endeavoring to recover approximately $1.3 billion in funds from the two co-founders. 
The firm is reported to owe creditors a total of $3.5 billion. 
In April, Zhu and Davies played a role in launching Open Exchange, a platform designed to facilitate the trading of claims against insolvent cryptocurrency companies. 
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Judge Rejects Contempt Motion Against 3AC Crypto Hedge Fund Co-founder Kyle Davies

Crypto Intelligence

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