3AC Founders Kyle Davies and Su Zhu Tagged in Tweet Delivering Court Subpoena

Stacy Elliott
Stacy Elliott January 6, 2023
Updated 2023/01/06 at 9:12 AM
5 Min Read

There’s been an interesting contrast between how chatty Three Arrows Capital co-founders Kyle Davies and Su Zhu’s have been on Twitter and how difficult they’ve otherwise been to reach, according to company liquidators.

So it was hardly surprising that after getting permission from the judge overseeing the company’s bankruptcy proceedings, Teneo Restructuring tagged @zhusu and @kyleldavies in a tweet with a copy of a subpoena on Twitter.

The Singapore-based crypto hedge fund, which also goes by 3AC, was ordered to liquidate in June, following weeks of speculation that the company had endured severe losses following the collapse of the TerraUSD algorithmic stablecoin in May.

Davies later confirmed that 3AC had lost approximately $200 million on its TerraUSD position in an interview with The Wall Street Journal. Pressure mounted as 3AC’s creditors margin called 3AC, meaning they asked them to provide more collateral to secure borrowed funds. The final blow came when Voyager Digital (which itself is now undergoing bankruptcy proceedings) issued a default notice for more than $600 million.

For a while, Davies and Zhu went quiet on social media.

In July, reports surfaced that the company’s Singapore office had been abandoned and the founders were missing. Around the same time, Zhu sent what would become his last tweet until November. He criticized Teneo for missing a deadline to claim StarkWare tokens, causing the firm to “lose substantial value.”

Meanwhile, Davies retweeted Zhu’s message and went dark on social media too.

But both the 3AC founders resurfaced in November, shortly after crypto exchange FTX filed for bankruptcy. One of the main reasons they broke their silence, according to Zhu, was to allege that FTX founder Sam Bankman-Fried’s firm had been actively hunting 3AC’s positions.
“I have firmly said we were hunted since my July Bloomberg interview. Go back and read it,” Zhu wrote. “Simply the truth, but one so inconvenient that at the time my own advisors didn’t want me to say it [because] it could be ‘bad optics’ and seen as ‘deflecting.’”

Teneo has also been pursuing information in the High Court of the Republic of Singapore, where a judge ordered 3AC and its co-founders to submit affidavits and financial documents in December. A day later, the liquidators seized $35 million worth of funds tied to the firm and were seeking permission to sell the company’s “Much Wow” superyacht.

It’s not unprecedented for a subpoena to be served over Twitter.

In fact, the company has a frequently asked questions page dedicated to it. But the example they cite there has more to do with Twitter receiving a subpoena and having to turn over information about a user’s account, not one user tagging another in a tweet that includes an image of a subpoena. Nonetheless, Twitter writes, the whole experience “can be an unsettling experience.”

Twitter did not immediately respond to a request for comment from Decrypt.

 

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This article was first published on Decrypt.co
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