- Brazen Kyle Davies has refused to apologize for losing billions in investors' money
- He has been on the run since the collapse of his 3AC hedge fund in mid-2022
- His business partner Su Zhou was sentenced to 3 months in prison last year
The shameless co-founder of bankrupt cryptocurrency hedge fund 3AC said he was “not sorry” the company lost billions in investors' money.
Kyle Davies and his business partner Su Zhu are facing more than $3.5 billion in creditor claims after their once-successful fund collapsed amid the 2022 crypto slump.
While Zhou was arrested and spent three months in prison for failing to coordinate with the liquidators, Davies managed to avoid the same fate by remaining on the run.
In an appearance this week on the Unchained podcast, where he declined to reveal his location, Davis smiled when asked if he had any regrets about losing billions in investors' money.
“Am I sorry the company went bankrupt?” No, just as companies go bankrupt, almost all companies go bankrupt, right? He said.
Davies and Chu founded 3AC, or Three Arrows Capital, in 2012, raising billions from investors as cryptocurrencies soared.
At its peak, the fund managed around $18 billion, but suffered huge losses when the LUNA and Terra cryptocurrencies collapsed.
According to Capital.com, the founders defaulted on loans after their hedge fund went bankrupt, which also came in part from them borrowing from more than 20 institutions.
As investors sought to recover their billions, court orders in the British Virgin Islands, and later in Singapore and the United States, had difficulty catching Davies.
In September 2023, Zhou was arrested at Changi Airport in Singapore for contempt of court after ignoring orders to comply with liquidators, but Davies claimed in a podcast appearance this week that they did not know they were being sought.
When host Laura Chen asked him if he planned to fire lawyers who allegedly failed to inform them of a court date, he said: “Maybe we should.”
He said it was clear that Choo did not know, otherwise he would not have entered Singapore again, which is why he did not return to the country despite giving up his US citizenship to obtain Singaporean citizenship.
“Sue's prison sentence certainly surprised him,” Davis told New York Magazine. “No one wants to go to prison.”
Davies was also sentenced to four months in prison like Cho by Singaporean authorities, but his whereabouts have remained a mystery – although he told the outlet he was in Portugal in February.
He added that although he would not return to Singapore “immediately”, given the threat of imprisonment, he felt that “it is clear that these matters will be resolved at some point, there will be compromises”.
Many reacted angrily to Davies' stance in the podcast appearance, where he appeared to take a flippant approach to talking about the missing money.
“It's how you build it or what you do about it.” “We are definitely doing our best,” he said when asked about his remorse.
“We can add value in different ways. At the very least, we can tell the next three darts how to do things better when they go bankrupt.”
His talk of “building up” from failed companies comes as scrutiny has also dropped on the startup in April 2023 by the founders of 3AC, OPNC, a bankruptcy claims exchange.
According to Coindesk, OPNX was officially reprimanded by Dubai's cryptocurrency regulatory authority for operating an unregulated exchange within a month of its founding.
By February 2024, the exchange was closed.
As Davis continues to emerge in the cryptocurrency world, Chu – who was released in December for good behavior – has remained active through his work. Twitter accountwhere he still provides business advice.
Their demise came at the same time that fellow crypto heavyweights were also facing consequences, with many saying the crypto industry's weaknesses were becoming more apparent.
Sam Bankman Fried, founder of the notorious Bahamian cryptocurrency company FTX, was convicted of one of the largest financial frauds in history while Chu was behind bars.
He is awaiting sentencing scheduled for March 28. He faces up to 100 years behind bars.
Meanwhile, former Binance CEO Changpeng Zhao pleaded guilty to anti-money laundering violations, and the trader behind Luna — who contributed to the collapse of 3AC — was ordered to be extradited to the US and South Korea.
While US prosecutors have condemned Bankman Fried as one of the worst financial criminals in history, the disgraced trader has placed the blame for the broader cryptocurrency collapse of 2022 squarely on 3AC.
“I suspect they may account for 80% of the total original infection,” he told New York Magazine in 2022.
“They weren't the only people who blew up, but they did it in a bigger way than anyone else.” And they had a lot more trust than the ecosystem before that.
