3AC founders Kyle Davies and Su Zhu are not happy about liquidators taking action against them, but the crypto villain duo has reacted with rather different responses.
Liquidators Teneo seized US$35.6 million from 3AC bank accounts in Singapore, marking the largest amount of money obtained since the hedge fund’s collapse.
According to a court hearing, liquidators also recovered US$2.8 million from forced redemptions of investments and an unspecified number of crypto tokens and NFTs.
Read more: Three Arrows Capital’s NFTs Are on the Move
Liquidators called out Davies and Zhu for being uncooperative, stating the pair had been “active and responsive to comments via Twitter” but “repeatedly failed to engage” with liquidators.
Latham and Watkins lawyer Adam Goldberg, who is representing 3AC liquidators vis Teneo said the duo have been doing CNBC and Bloomberg media interviews to “rehabilitate their reputations” whilst shifting the blame towards FTX.
“Since the collapse of FTX, Mr. Davies has appeared on CNBC and both of the founders have been very active on Twitter, calling out FTX and advancing the theory that FTX caused the debtors’ collapse. It’s interesting, to say the least, that the first time we’ve heard this theory that FTX caused the downfall of this debtor was after FTX’s own sensational collapse,” Goldberg stated.
During a virtual hearing for the Southern District of New York Bankruptcy Court on Friday, Judge Martin Glenn said 3AC liquidators will need to present further documents to be granted permission to subpoena 3AC’s founders through Twitter.
Kyle, Su… and Matthew 6:1
Davies and Zhu have hit back at liquidators, claiming “unfortunately our Liquidators seem to refuse to engage us constructively.”
“After months, cash in a bank account, minimal asset sales, there have still been no disbursements to creditors,” Davies tweeted. “Let us speak openly with all creditors to find a better way forward.”
Attached to the tweet was an image containing five brief paragraphs expanding on criticism of the liquidators. In the text, Davies accused liquidators pf being “intent on making threats against us, and spending a lot of time, and money on continuing Court proceedings in a number of jurisdictions.”
“In our view, such time, and costs should be spent engaging us in the best interests of the creditors,” he continued. “We invited the liquidators to engage us positively, constructively, and without threats.”
Meanwhile, fellow co-founder Zhu shared a message from one of their creditors: “all I do is send emails to the Teneo people and they give me bullshit copypasta [sic] boilerplate back with the goal of maximally not paying out anyone it seems.”
Read more: “People May Call Us Stupid”: 3AC Founders Break Silence But Say Nothing
Zhu followed up the tweet with a series of quotes from the Bible; specifically Matthew 6:1. “Be careful not to do your `acts of righteousness’ before men, to be seen by them. If you do, you will have no reward from your Father in heaven. So when you give to the needy, do not announce it with trumpets, as the hypocrites do in the synagogues and on the streets, to be honored by men,” Zhu tweeted.
“I tell you the truth, they have received their reward in full. But when you give to the needy, do not let your left hand know what your right hand is doing, so that your giving may be in secret. Then your Father, who sees what is done in secret, will reward you,” he continued.