Crypto Co-founder's Karma: Davies Pledges OPNX Earnings to Creditors

Crypto Co-founder's Karma: Davies Pledges OPNX Earnings to Creditors

The co-founders of Three Arrows Capital (3AC), a crypto hedge fund that collapsed in 2022, have made a commitment to allocate a portion of their earnings from their latest crypto venture to compensate the creditors who suffered losses in the fund's downfall. Kyle Davies, one of the co-founders, expressed during a Twitter Space session on July 3 that it would be a gesture of "good karma" to contribute the potential profits from Open Exchange (OPNX) towards the restitution of 3AC's creditors.


 

Davies referred to this proposed reimbursement strategy as a "shadow recovery process," distinct from the ongoing official liquidation process handled by global consulting firm Teneo. 

According to Davies, this initiative is groundbreaking and would permit him and his partner, Su, to donate funds to 3AC creditors, but only if they were early investors in and supporters of OPNX. He mentioned that a number of creditors have already been repaid in full, while acknowledging that those who are unwilling to engage with them are not obligated to do so.

Davies emphasized that they firmly believe that by doing good and offering an avenue for creditors to recover their losses, they are enabling a positive outcome. Conversely, if they perform poorly and creditors fare well, they view it as a beneficial outcome in terms of karma or similar concepts.


 

When questioned about their involvement in a new venture while their bankrupt hedge fund is still undergoing the liquidation process, Davies argued that the creditors would actually benefit from the new enterprise.

The launch of OPNX on April 4 created controversy for Davies and Su, as some members of the crypto community criticized them for initiating a new project while seemingly evading their responsibilities regarding the collapse of their hedge fund.

3AC filed for Chapter 15 bankruptcy protection on July 1, 2022, and subsequent legal documents revealed that the fund owes over $2.8 billion to more than 20 different firms.

The whereabouts of Davies and Su remain uncertain, as liquidators resorted to serving them subpoenas via Twitter on January 5 due to challenges in locating them. A recent report by The New York Times alleges that Davies and Su have been spending the majority of their time engaged in surfing activities in Bali.

As of the latest update on June 27, the liquidators have announced their intent to recover a total of $1.3 billion in lost funds directly from Davies himself.

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