The collapsed hedge fund’s founder Kyle Davies was accused of neglecting his duties as he “shamelessly” promotes his new crypto project.

Kyle Davies refused to comply with a court subpoena for the books and records of his former crypto hedge fund Three Arrows Capital (3AC), a New York court was told in a Tuesday night filing.

Davies was accused of stonewalling a probe into the company, which managed as much as $3 billion in assets before collapsing last year, while “shamelessly” promoting new crypto ventures.

Davies and co-founder Su Zhu “have refused to meaningfully engage,” said a filing on behalf of Russell Crumpler and Christopher Farmer, who now represent the bankrupt company. Davies and Zhu “have made only selective and piecemeal disclosures” and “refusal to cooperate violates their duties owed to Three Arrows,” it added.

Farmer and Crumpler attempted to serve a court-approved subpoena to Davies via Twitter on Jan. 5, but were ignored despite Davies’ active social media presence, the document said.

“He has not even attempted to reach out to undersigned counsel to voice an objection or concern with the topics of the subpoena,” the filing said. “This is not a question of partial compliance, but of no compliance whatsoever.”

“All the while, Mr. Davies has continued to post on his Twitter account, openly ignoring the Court’s directives and enjoying media attention while he continues to thwart efforts by the Foreign Representatives to gain access to documents and information,” the filing said.

3AC’s collapse last June heralded a new crypto winter. Companies with exposure such as Voyager Digital, Celsius and Genesis Asia Pacific (which, like CoinDesk, is part of the Digital Currency Group) have since filed for bankruptcy, and 3AC’s new management takes a dim view of reports that Zhu and Davies are now apparently already looking to new ventures.

“Shamelessly, while ducking his obligations to his failed company, Mr. Davies has been recently active in an effort to raise tens of millions to start a new crypto exchange called ‘GTX,’” the filing said.

Farmer and Crumpler are seeking to compel Davies to comply with the subpoena, a request due to be considered at a March 2 hearing.

Counsel for Davies and Zhu did not immediately respond to a CoinDesk request for comment. In a January interview with CNBC, Davies said he had been “contactable the entire time” and “cooperating the whole way,” and denied that he was in Indonesia due to its weak extradition laws with the U.S.

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The decision will provide Three Arrow’s liquidator, Teneo, the ability to probe assets held in Singapore.

The liquidators of Three Arrows Capital (3AC) secured a crucial court decision in Singapore, which will give them the ability to probe the local assets of the defunct crypto hedge fund, Bloomberg reported citing people familiar with the matter.

The Singapore High Court granted the request of Three Arrows Capital’s appointed liquidator, Teneo, on Monday. This means that the court now legally recognizes the liquidation order originally filed in the British Virgin Islands.

Recognition in Singapore gives Teneo the freedom to request all financial records held locally, this includes bank accounts, cryptocurrencies, stakes in companies and properties, the report said. In July, 3AC co-founder Su Zhu was reportedly looking to sell one of his homes in Singapore worth $35 million.

The fall of the hedge fund was part of a wider crypto contagion that swept across the entire industry. In May, algorithmic stablecoin TerraUSD (UST) collapsed alongside the LUNA ecosystem, 3AC had exposure to the ecosystem and Su Zhu described the episode as “humbling”.

After Terra’s collapse, crypto lenders like Celsius Network and Voyager Digital filed for bankruptcy whilst several firms were forced to halt withdrawals as the liquidity crunch gripped the crypto markets.

Teneo has gained control of at least $40 million of Three Arrow Capital’s assets so far, this represents a small fraction of creditor claims, which are estimated to be at least $2.8 billion, according to a 1,157-page court filing published in July.

The founders of Three Arrows Capital broke their silence shortly after the court filing was released, with Su Zhu and Kyle Davies describing the collapse as /”regrettable.”

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Creditors say the fund’s remaining assets could be “transferred or otherwise disposed of” before creditors get their share.

Where in the world are Su Zhu and Kyle Davies? Lawyers involved in the liquidation proceedings of Three Arrows Capital’s British Virgin Islands fund would certainly like to know, as the hedge fund founders have not been cooperative in the proceedings so far and their current location is unknown.

In court documents filed late Friday in New York, lawyers acting on behalf of the creditors said that the founders of the fund “have not yet begun to cooperate with the [proceeding] in any meaningful manner.”

The lawyers said that persons identifying themselves as “Su Zhu” and “Kyle” were present on an initial Zoom call, but their video and audio was turned off and they would not respond to questions posed directly to them, with only their legal representatives answering questions.

Lawyers for the creditors that visited Three Arrows’ Singapore office found it abandoned, according to court documents.

Concerns are mounting that assets belonging to Three Arrows, which are largely in the form of cash, crypto, and NFTs could be easily transferred.

Already, NFTs belonging to Three Arrows’ NFT fund Starry Night have been transferred to a new wallet for unexplained reasons.
The creditors are seeking to freeze Three Arrows’ assets. But first, they are requesting the court to compel Three Arrows’ founders to list out the fund’s assets.

They are also asking the court to subpoena the founders and have them provide a list of company assets including wallets it controls, bank accounts, digital assets in its possessions, derivatives contracts, securities, accounts receivables, and all company records.

A court hearing is scheduled for Tuesday morning in New York.

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