TL;DR Breakdown
- 3AC co-founder Kyle Davies has challenged the jurisdiction of the bankruptcy court hearing his case.
- The court will hear Davies’ arguments at the next hearing.
Description
In an intriguing twist to the ongoing legal proceedings surrounding the collapsed crypto hedge fund, Three Arrows Capital (3AC), co-founder Kyle Davies has filed documentation with the U.S. Bankruptcy Court, asserting that he is a full citizen of Singapore and not the United States. The move comes as Davies seeks to distance himself from the … Read more
In an intriguing twist to the ongoing legal proceedings surrounding the collapsed crypto hedge fund, Three Arrows Capital (3AC), co-founder Kyle Davies has filed documentation with the U.S. Bankruptcy Court, asserting that he is a full citizen of Singapore and not the United States. The move comes as Davies seeks to distance himself from the jurisdiction of U.S. courts.
3AC co-founder argues bankruptcy courts jurisdiction in his lawsuit
Davies’ filing, submitted on August 1st, contained notarized and Apostilled copies of the form he submitted for the renunciation of his U.S. citizenship on December 15, 2020. According to the documentation, he was granted Singaporean citizenship in January 2021, and he is now contending that he is no longer subject to the authority of U.S. courts. The court documents reveal that Davies decided to renounce his U.S. citizenship after getting married to a Singaporean national in 2017. He subsequently obtained permanent residency status in the country and now has two children there.
Singapore’s policy against dual nationality compelled him to relinquish his U.S. citizenship. This legal maneuver by Davies follows a subpoena issued at the behest of 3AC’s liquidators, who are seeking to gather information about the fund’s collapse. Davies, along with his co-founder Su Zhu, had been subpoenaed through Twitter (now known as X) in January, as their whereabouts were unknown. However, Davies chose to ignore the order, and this action has led to arguments about whether he should be held in contempt of court.
Davies’ legal team argues that he cannot be validly served with the legal process as a non-party in the case, citing his lack of U.S. citizenship since well before the case commenced. They contend that since he is not a U.S. citizen, the court does not possess personal jurisdiction over him, leading them to call for the Service Order and Compel Order to be vacated. The controversy surrounding the whereabouts of both Davies and Zhu has captivated the cryptocurrency community ever since 3AC’s bankruptcy filing in July 2022. Lawyers representing Davies have appeared before the bankruptcy court on his behalf.
The court will hear Davies’ citizenship appeal in its next hearing
The revelation of Davies’ Singaporean citizenship has the potential to complicate the legal proceedings further. At the heart of the matter lies the pursuit of recovering approximately $1.3 billion in funds from Davies and Zhu, with reports indicating that 3AC owes creditors a staggering $3.5 billion. The situation has sparked intense online discussions, particularly among crypto users directly affected by the market crash.
Notably, in the wake of the turmoil surrounding 3AC’s collapse, Davies and Zhu introduced a platform named Open Exchange. This platform facilitates the trading of claims against bankrupt cryptocurrency firms, aiming to address the aftermath of such financial crises. Additionally, pieces from a nonfungible token collection that was once owned by the 3AC founders have been auctioned by Sotheby’s.
The upcoming hearing on August 8th will provide a platform for the bankruptcy court to delve into the intricate details of Davies’ citizenship status and its potential implications on the legal proceedings. As stakeholders eagerly await the court’s decision, the case continues to highlight the complexities and challenges that can arise in the realm of cryptocurrency, particularly within the context of legal battles and financial crises.
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