LayerZero CEO Accuses Three Arrows Capital's Kyle Davies of Pre-Collapse Deception
Summary:
LayerZero CEO, Bryan Pellegrino, publicly accuses Kyle Davies of Three Arrows Capital of trying to convince the company to move its treasury to the hedge fund before its failure. Pellegrino alleged that Davies promised better borrowing rates prior to the collapse. The CEO also lashed out against Davies for misleading and exploiting partnerships. The LayerZero CEO's comments came amid a wider discussion of 3AC's bankruptcy, co-founders' subsequent actions, and Teneo's efforts to procure $1.3 billion directly from those parties after 3AC's insolvency.
LayerZero's CEO Bryan Pellegrino has made a public claim that Kyle Davies from Three Arrows Capital attempted to convince LayerZero to transfer their whole treasury to the hedge fund before it got insolvent. The claim, which was made via a social media post responded to by Pellegrino, alleges that 'better rates than other borrowers' were promised by Davies prior to the fund's downfall. Pellegrino emphasized the severity of deceitfully exploiting friendships and partnerships.
In a related podcast, Davies didn't apologize for the billions lost in the bankruptcy of 3AC and insisted that his professional reputation remained solid, in spite of the digital backlash he encountered. He stated his enduring trust in upward-only market trends, suggesting that lenders decided to risk their client's funds on a high-risk proposition.
Moreover, Pellegrino chastised Davies for his misleading and exploitative behaviour towards peers and partners. He argued that 3AC's financial instability was evident when proposing the deal to LayerZero. There were no responses from Davies to Pellegrino’s posts on social media by the time of the news release.
After experiencing a downfall in May 2022, 3AC, a key player in the crypto hedge fund field with assets beyond $3 billion, declared Chapter 15 bankruptcy in July that year due to liquidity struggles.
Davies and Su Zhu, 3AC's founders, then deployed Open Exchange (OPNX) in April 2023, a trading platform for crypto derivatives and claims. The platform ceased operations in February of the following year.
The two were later subpoenaed early in 2023 after avoiding contact with relevant officials and failing to cooperate fully with liquidators.
In September that year, Singapore's authorities arrested Zhu for non-cooperation during the 3AC liquidation process and he remained in custody until December. Davies, on the other hand, managed to avoid capture, revealing on a recent podcast that he purposely stayed away from Singapore to avoid potential incarceration.
Teneo, the 3AC liquidator, managed to seize $1.14 billion worth of assets belonging to Zhu and Davies in late December in a British Virgin Islands court. Teneo aims to reclaim $1.3 billion directly from Zhu and Davies, asserting that they took on significant financial risk with investor funds following 3AC's insolvency.
Published At
3/22/2024 12:05:24 PM
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