Kyle Davies, co-founder of bankrupt crypto hedge fund Three Arrows Capital (3AC), has been ordered to answer the subpoena issued to him in Januaryor risk being held in contempt of court.
The Jan. 5 subpoena was issued to Davies via Twitter by a New York bankruptcy court, instructing Davies to provide 3AC’s liquidators with documents within 14 days such as seed phrases and private keys, as well as company communications and other company-related documents.
After failing to hear from Davies, United States Bankruptcy Judge Martin Glenn granted a motion to compel on March 22, noting that Davies can appear and contest the arguments made by 3AC liquidators, “or he can fail to appear as he has done so far, and, frankly, take his chances.”
There would be peace on Earth if we all spent more time in Bali pic.twitter.com/OgA35g81BE— Kyle Davies (@KyleLDavies) March 23, 2023
A motion to compel is a legal request that the court will compel one party to provide evidence to the party that brought the motion.
People found to be in contempt of court during civil proceedings are usually hit with a fine, but may also be imprisoned. The purpose of civil contempt is to coerce compliance, so the severity of punishments can increase until the order is carried out.
The current whereabouts of both Kyle Davies and fellow 3AC co-founder Su Zhu remains unknown.
Davies most recent tweet on March 23 appears to show a photograph of him in Bali, however, an earlier tweet from the same day shows him standing with Su Zhu and one other person in Bahrain.
This is not Dubai. This is near World Trade Center in Bahrain pic.twitter.com/owVPctfINA— Silv (@SilvXBT) March 22, 2023
Su Zhu also shared a tweet with a recognizable landmark in the background on the same day, however, suggesting he may be or have recently been in Dubai.
gm pic.twitter.com/50ykp8mvYF— Zhu Su 朱溯 (@zhusu) March 22, 2023
According to lawyers for 3AC’s liquidators, Davies has “chosen to ignore his duties to Three Arrows.”
Meanwhile, the pair from 3AC has teamed up with CoinFLEX to launch OPNX, a marketplace aimed at enabling claims in crypto firm bankruptcy proceedings to be bought and sold.