Kyle Davies, the founder of collapsed crypto hedge fund Three Arrows Capital (3AC) says he has nothing to apologize for in a new interview on the latest episode of Unchained.
“Am I sorry for a company going bankrupt? No, like companies go bankrupt, almost every company goes bankrupt, right?” reasoned Davies. His words came in answer to criticisms that he had shown no remorse when his company went bust.
Davies added “it’s how you build or what you do about it […] We can add value in various ways. At a minimum, we can even tell the next Three Arrows how to do things better when they go bankrupt.”
Davies confirmed he will not be returning “immediately” to Singapore, where 3AC is headquartered. Authorities in the country expect Davies to serve the same four-month jail sentence that 3AC co-founder Zhu served at the end of last year, but Davies hinted that he’s looking to avoid punishment: “obviously these things just resolve at some point, there are settlements.”
Finally Davies hinted that he was “in Europe” but declined to confirm whether he is still in Portugal, which is where he himself reported he was last month.
The Rise and Fall of Three Arrows Capital
Born in the US, Kyle Davies met his 3AC co-founder Su Zhu while studying and together they founded the company in 2012 in Singapore as a hedge fund that arbitrage traded forex derivatives.
3AC pivoted to crypto trading in 2017, around the time when Davies renounced his US citizenship to become a Singapore citizen.
In May 2022, a huge crypto project called Terra collapsed when its dollar-pegged stablecoin UST slipped its peg and spiralled down to nothing. Terra sold UST on the promise that an algorithm could peg it to USD by burning a sister token called LUNA.
However, on May 7, $2 billion exited UST en masse after interest rates on its number one use-case, earning 20% yield through locking tokens in Anchor protocol, declined.
Although there is some debate over whether interest rates or a coordinated attack caused the sudden exodus, the subsequent death spiral meant many more billions left Terra’s ecosystem over the ensuing days.
At the time when Terra collapsed, 3AC had $200 million to half a billion LUNA tokens.
In mid-June that year, the company announced it had incurred significant losses as a result of exposure to Terra and by July 1 the company had filed for Chapter 15 bankruptcy proceedings.
Various other crypto companies were affected by the Terra contagion, including lenders like Celsius, Vauld and Voyager and exchanges, including the historic FTX, the sector’s largest bankruptcy and one of the largest bankruptcies in history.
Davies and Zhu recently tried to launch a bankruptcy claims exchange but it last month ceased operations after landing in hot water with Dubai regulators.
The post 3AC Co-Founder Kyle Davies Stands Firm, Won’t Apologize for Crypto Hedge Fund Bankruptcy appeared first on Cryptonews.
