Liquidators file motion to hold Kyle Davies in contempt.

The liquidators of 3AC, Kyle Davies’ and Su Zhu’s former crypto hedge fund, have filed court documents on June 14 accusing Davies of ignoring a subpoena related to bankruptcy proceedings and are requesting that he be held in contempt of court. The legal team for the creditor claims that Davies is intentionally delaying the recovery of assets from the hedge fund. The motion includes civil sanctions, such as an award of attorneys’ fees and a daily fine of $10,000 until Davies complies. However, the motion does not apply to Su Zhu, who is exempt from the jurisdiction of the United States courts due to his Singaporean citizenship.

The subpoena was issued on Twitter on January 5, requesting that Davies and Zhu engage in asset recovery after 3AC filed for Chapter 15 in July 2022. Creditors have accused the founders of being “on the run” from the bankruptcy court, and their whereabouts and legal jurisdictions have posed significant challenges to the recovery process. The liquidators had to obtain permission from Singapore and U.S. authorities to subpoena Davies and Zhu via digital channels.

The court documents state that instead of complying with subpoenas and information requests, the founders have ignored their obligations and hidden their whereabouts, creating a new venture to trade claims in cryptocurrency bankruptcy cases. The motion also requests that personal jurisdiction be sought on Davies, who is believed to be in Bali. An auction held last month for parts of 3AC’s nonfungible token collection raised $2.5 million, while the firm reportedly owes creditors a total of $3.5 billion. At its peak, 3AC’s estimated assets under management reached $10 billion.

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