LayerZero Labs CEO, Bryan Pellegrino, has levied accusations against Kyle Davies, co-founder of Three Arrows Capital (3AC), alleging an attempt to entice LayerZero to commit its entire treasury to the now-defunct hedge fund mere days before its demise. This revelation comes amidst Davies’ unapologetic stance towards investors who suffered losses in 3AC’s downfall.
In a recent interview, Davies showed no remorse for investors grappling with the aftermath of 3AC’s bankruptcy. Echoing this sentiment, Davies reinforced his steadfast belief in perpetual market gains, emphasizing the investors’ autonomy in choosing to engage in high-risk ventures.
Pellegrino countered Davies’ narrative, asserting that the former made enticing promises of superior interest rates to LayerZero as a desperate maneuver preceding 3AC’s collapse. Accusing Davies of exploiting trust and misrepresenting 3AC’s financial health, Pellegrino condemned such actions as egregious betrayals of trust.
The LayerZero chief further alleged that 3AC was insolvent at the time of extending the offer to LayerZero, shedding light on the dubious nature of the proposal. Despite Pellegrino’s assertions, Davies refrained from responding to the allegations at the time of publication.
Once commanding billions in assets under management, 3AC’s fortunes took a nosedive following the liquidity crisis triggered by Terra-Luna’s collapse in May 2022. Subsequently filing for Chapter 15 bankruptcy, the hedge fund’s downfall marked a significant setback in the crypto sector.
Following the demise of 3AC, Davies and his associate Su Zhu ventured into launching Open Exchange (OPNX), a platform specializing in crypto derivatives and claims trading. However, this endeavor was short-lived, culminating in the platform’s closure earlier this year.
While Zhu faced legal repercussions, including arrest and imprisonment in Singapore, Davies has managed to evade similar consequences by remaining outside the jurisdiction. Expressing his intent to steer clear of Singaporean authorities, Davies revealed his determination to avoid incarceration stemming from the fallout of 3AC’s liquidation.
