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Kyle Davies on Three Arrows Capital’s Collapse
Kyle Davies, the founder of the collapsed crypto hedge fund Three Arrows Capital (3AC), recently addressed criticisms regarding the company’s bankruptcy in an interview on the latest episode of Unchained. Davies expressed his perspective on the situation, emphasizing the lessons learned from the experience.
Davies’ Response to Criticisms
In response to criticisms about showing no remorse for the company’s collapse, Davies stated that he has nothing to apologize for, as bankruptcies are not uncommon in the business world. He highlighted the importance of learning from failures and finding ways to add value even in challenging circumstances.
Future Plans and Legal Issues
Davies revealed that he will not be returning to Singapore immediately, where 3AC is headquartered. While authorities in Singapore expect him to serve a jail sentence, Davies hinted at seeking alternative resolutions to the legal matters. He also mentioned being in Europe but did not confirm his current location.
The Story of Three Arrows Capital
Founded in 2012 by Kyle Davies and Su Zhu, Three Arrows Capital started as a hedge fund trading forex derivatives in Singapore. The company later transitioned to crypto trading in 2017, coinciding with Davies renouncing his US citizenship to become a Singaporean.
The Terra Collapse
In May 2022, the crypto project Terra faced a significant crisis when its stablecoin UST lost its peg to the USD, leading to a massive exodus of funds. This event had a ripple effect on various crypto companies, including Three Arrows Capital, which suffered substantial losses due to its exposure to Terra.
Bankruptcy and Industry Impact
By July 2022, Three Arrows Capital filed for Chapter 15 bankruptcy following the fallout from the Terra collapse. The incident had broader implications for the crypto industry, affecting companies like Celsius, Vauld, and Voyager, as well as leading exchanges such as FTX.
Despite attempts to navigate the aftermath, including launching a bankruptcy claims exchange, Davies and Zhu faced challenges with regulatory authorities, ultimately ceasing operations in the face of legal scrutiny.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
