LayerZero co-founder and CEO Bryan Pellegrino has accused Kyle Davies of Three Arrows Capital of attempting to convince LayerZero to transfer its entire treasury to Three Arrows Capital shortly before its collapse.
Pellegrino made the allegation in response to an X post on Thursday, claiming that Davies promised LayerZero better rates than other borrowers in a last-ditch effort before the collapse of Three Arrows Capital.
Pellegrino criticized Davies for misleading and taking advantage of associates and partners. He further asserted that Three Arrows Capital was financially unstable when proposing the arrangement to LayerZero.
In an episode of the Unchained Podcast, Davies refused to apologize for the billions lost in Three Arrows Capital’s bankruptcy and the collapse of the firm. He maintained that his professional reputation remained intact despite facing criticism for his past misdeeds on social media.
Three Arrows Capital, a notable hedge fund manager in the crypto industry with assets exceeding $3 billion, filed for Chapter 15 bankruptcy in July 2022 due to liquidity challenges following the collapse of Terra in May 2022.
Davies and Su Zhu, the co-founders of Three Arrows Capital, launched Open Exchange (OPNX), a platform for crypto derivatives and claims trading, in April 2023. However, the platform ceased operations earlier this year, in February.
Davies and Zhu faced legal issues, including subpoenas and asset freezes, related to the liquidation of Three Arrows Capital. Zhu was arrested in Singapore for non-cooperation in the liquidation inquiries, while Davies avoided apprehension.
A British Virgin Islands court froze $1.14 billion worth of Davies and Zhu’s assets, and the liquidator Teneo seeks to recover $1.3 billion directly from them, alleging significant leverage with investor funds after Three Arrows Capital became insolvent.
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