In the bankruptcy case of the defunct cryptocurrency hedge fund Three Arrows Capital (3AC), a judge has denied a motion to hold co-founder Kyle Davis in contempt of court and impose sanctions. The decision was made by Judge Martin Glenn on August 11 in the US Bankruptcy Court for the Southern District of New York. The motion to serve Davis a subpoena via X (formerly known as Twitter) was considered jointly by 3AC, but the judge noted that Davis, a non-US citizen living abroad, was not Properly served according to federal laws that mandate compliance outside the United States.
Judge Glenn's decision was based on the presumption that Kyle Davis was a US citizen, as records indicated. However, Davis' lawyers presented evidence that he applied to renounce his US citizenship in December 2020 and became a Singaporean citizen through marriage, as Singapore does not allow dual citizenship. This new information changed the context of the case. The judge suggested that foreign representatives could seek compliance from Davis through Singaporean courts.
The judge denied the contempt motion, citing that US courts lacked jurisdiction over Davis, who is now known to be a Singaporean citizen. The whereabouts of Davis and his co-founder Su Zhu have been largely unknown since 3AC collapsed in July 2022. The liquidators handling the case are attempting to recover around $1.3 billion in funds from the co-founders, as the company reportedly owes creditors $3.5 billion. In April, Davis and Zhu were involved in launching Open Exchange, a platform designed for trading claims against bankrupt cryptocurrency firms .
