The co-founders of collapsed cryptocurrency hedge fund Three Arrows Capital (3AC) have committed to donating funds for “good karma” by directing a portion of future revenue from their latest crypto venture to creditors who suffered losses during the fund’s 2022 collapse.
In a recent Twitter Spaces session hosted by IBC Group CEO Mario Nafwal, co-founder Kyle Davies revealed plans to distribute a portion of OPNX’s future earnings to affected creditors. This charitable initiative is separate from the ongoing liquidation process and is intended to provide additional support to those who have lost funds.
Davies reiterated the co-founders’ strong belief in karma and said they intend to supplement recoveries achieved through the formal liquidation process. He noted that some creditors have already been paid and acknowledged that those who do not wish to engage with them also have that option.
"We firmly believe that by doing good and giving creditors more opportunities to recover, we can have a positive impact. If we shake things up and they prosper, that's great. It's about good karma or whatever you want to call it."
--Kyle Davies, co-founder of 3AC
Controversy surrounding the launch of OPNX
The co-founders’ announcement comes as their involvement in new cryptocurrency exchange OPNX, which launched on April 4, comes under scrutiny.
Critics in the cryptocurrency community worry that the pair appear to be evading responsibility for the collapse of a previous hedge fund while pursuing new investments on the picturesque beaches of Bali.
However, Davies stressed that their new entrepreneurial journey was directly linked to their creditors, who would ultimately benefit from their latest venture.
OPNX claims 20 million users and $20 billion in claims, and prominent players such as Celsius Network and FTX have sought Chapter 11 protection due to market volatility over the past year.
Three Arrows Capital filed for Chapter 15 bankruptcy protection on July 1, 2022. Court documents show that the company owes $3.5 billion to 27 cryptocurrency companies, and liquidators seek to recover $1.3 billion from Davies and Su personally.
While the road to recovery remains challenging for Three Arrows’ creditors, the co-founders’ pledge to donate future earnings from their new cryptocurrency venture represents a unique effort to address the losses incurred by those affected.
Whether this move will help restore trust within the crypto community and lead to a more positive outcome for creditors remains to be seen.
