Three Arrows Capital’s Recovery Plan Infuriates Liquidators

3AC co-founders deliver a ‘shadow recovery plan’ they came up with while chilling in Bali. Liquidators are not impressed.

Troll character holds a burnt 3 arrows piece in front of a shocked man.
Created by Kornelija Poderskytė from DailyCoin
  • Journalist Mario Nawfal held a Twitter Spaces on the 3AC collapse.
  • Kyle Davies aims to refund creditors ‘in the spirit of Karma.’
  • Liquidators claim none of 3AC’s team responded to subpoenas.

Not all founders of failed crypto firms play League of Legends under house arrest at their parents’ house. Three Arrows Capital (3AC) co-founders participated in a cat-and-mouse game with liquidators, who even decided to send digital subpoenas to Su Zhu and Kyle Davies, as Twitter was the only available means of communication.

The Twitter Spaces answered many sensitive questions about creditors. According to the bankruptcy proceedings, there are 27 creditors, some of which are also insolvent. The total liabilities for the once-successful crypto hedge fund stand at a whopping $3.5 billion. Some of the landmark 3AC NFT collection pieces were sold off in Sotheby’s, retrieving $6.2 million in the process.

More recently, the co-founding pair fled to Bali, where Davies spent his time tripping on magic mushrooms and painting in cafes while partner Su Zhu played video games and surfed the ocean between meditation sessions. According to The New York Times, Indonesia could have been chosen as the option for a new home since it doesn’t have an extradition treaty with the United States.

Shadow Recovery Process for 3AC

Interestingly, Kyle Davies mentioned that he would “donate future earnings” to help the victims of the massive Terra Luna-infused crash, which took over the crypto markets and wiped out nearly $2 trillion in digital assets across the globe. Three Arrows Capital quickly folded along with several other large companies like Voyager Digital and Genesis.


These “donations” are in addition to the money recovered legally. Mr. Davies described himself as an avid Karma believer. The pair opened a new cryptocurrency exchange, OPNX, centered around debt claims.

While OPNX crypto exchange generated laughable trading amounts in the early days, the current stats suggest otherwise. To illustrate, the BTC/USDT perpetual trading volume for the last 24 hours is $38,818,597.88. On top of that, the debt claim exchange’s native token, Open Exchange Token (OX), has skyrocketed by 229.5% since last month.

3AC Liquidators Had Enough of Promises

Crypto investors on Twitter can’t wait to learn how much Karma is compelling Kyle Davies to pay. The bankruptcy proceeds are held by Teneo liquidators, which have continuously reported evasion of Zoom calls, not to mention real-life meetings.


Here’s what Crumpler & Farmer, the Teneo liquidator duo suggested in their reply in regards to yesterday’s Twitter Spaces:

"Instead of promising creditors future earnings from a nascent venture, we would recommend that the founders engage in the court-ordered activities already underway."

While the crypto fugitive pair have ignored subpoenas and emails, Teneo liquidators still have $1.3 billion in crypto assets and NFTs belonging to Three Arrows Capital. On top of that, Teneo pointed out that the co-founders were the ones to initiate the liquidation process but later purposefully avoided any contact with the liquidation officers.

On the Flipside

  • During the Twitter Spaces appearance, Kyle Davies refrained from giving further details on how the “shadow recovery process” would work.
  • According to court documents, the co-founder duo both have claims towering to over $35 million in the Three Arrows Capital bankruptcy case.

Why This Matters

The developments in the bankruptcy case of Three Arrows Capital (3AC) can provide closure to the investors who suffered from the situation and help lay the groundwork for clearer cryptocurrency regulation.

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This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Tadas Klimasevskis

Tadas Klimaševskis is a Lithuanian journalist at DailyCoin, specializing in covering the lighter side of the crypto industry such as memecoins and pop culture in the metaverse. He has experience as a music artist, English language teacher, and freelance writer, and uses his creative writing skills to summarize valuable information in his work. He is also a strong believer in the potential of blockchain and spends his free time listening to music, traveling, and watching basketball games.