Key Takeaways
- Bryan Pellegrino accuses Kyle Davies of attempting to secure LayerZero's treasury for 3AC with promises of better rates, just days before 3AC's collapse.
- Davies defends his professional reputation and investment philosophy on a podcast, despite the backlash and financial turmoil resulting from 3AC's bankruptcy.
- The legal aftermath of 3AC's downfall includes subpoenas and arrests.
Bryan Pellegrino, the co-founder and CEO of LayerZero, has leveled serious accusations against Kyle Davies, the co-founder of the now-collapsed Three Arrows Capital (3AC).
According to Pellegrino, Davies desperately bid to secure LayerZero's entire treasury for 3AC just days before its notorious downfall, promising "better rates than other borrowers" to salvage the sinking fund.
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This accusation comes after Davies's appearance on the Unchained Podcast, where he staunchly defended his actions during 3AC's collapse, refusing to apologize for the massive financial losses incurred.
Davies further assured his stance on X, stating:
I will never apologize for blowing up. We were traders who devoutly believed in up only forever. Still do. Lenders chose to gamble their own low-risk clients' funds on a high-risk thesis.
Pellegrino then posted a series of responses to this statement, saying that he would have supported Davies' view if not for his post-collapse actions, which the CEO of LayerZero finds desperate and deceitful.
He also added that there is a difference between facing liquidation and exploiting relationships, hinting at Davies' unethical ways of trying to save himself.
3AC's journey ended when the crypto market crashed in 2022, leading the once-thriving crypto hedge fund to file for Chapter 15 bankruptcy.
In the aftermath, Davies and Su Zhu, 3AC's co-founders, attempted to make a comeback with the Open Exchange (OPNX) platform. It was a bankruptcy claims exchange, which was subsequently under scrutiny by Dubai's crypto regulator for violating several market regulations.
Legal challenges continued to haunt the duo, with subpoenas issued via X in early 2023 due to their elusive behavior and lack of cooperation with liquidation efforts.
Zhu's arrest in Singapore for non-cooperation and Davies's strategic avoidance of Singapore to escape potential incarceration added to the saga.
As it unfolds, the crypto community watches closely, witnessing the consequences of one of the industry's most dramatic collapses.
