Kyle Davis, co-founder of bankrupt cryptocurrency hedge fund Three Arrows Capital, has been ordered to answer a subpoena issued to him in January or risk contempt of court.
The Jan. 5 subpoena, sent to Davis via Twitter after approval by the New York bankruptcy court, directs him to provide 3AC’s liquidators with documents such as seed phrases and private keys, as well as corporate communications and other company-related documents within 14 days.
After failing to hear Davis, U.S. Bankruptcy Judge Martin Glenn granted the motion to enforce on March 22, noting that Davis could appear in court and challenge the arguments advanced by the 3AC liquidators, "or he could act as Stay out of court as he has done so far and, frankly, take his chances." A motion to compel is a legal request that asks the court to compel a party to give evidence to the party making the motion.
People found in contempt of court in civil proceedings are usually fined, but may also be imprisoned. The purpose of civil contempt of court is to enforce obedience, so penalties can be increased until the order is enforced. Kyle Davis and 3AC co-founder Su Zhu are currently missing.
Davis' latest tweet, posted on March 23, appeared to show a photo of him in Bali. However, a tweet earlier the same day showed him standing with Su Zhu and another Bahraini. Su Zhu also shared a tweet on the same day, with a recognizable landmark in the background, however, suggesting that he may be currently or has recently been to Dubai. According to lawyers for the 3AC liquidators, Davies "chosen to disregard his duties to Three Arrows".
Meanwhile, the couple from 3AC partnered with CoinFLEX to launch OPNX, a marketplace designed to enable claims in crypto companies’ bankruptcy proceedings to be bought and sold.
