LayerZero’s co-founder and CEO, Bryan Pellegrino, says Kyle Davies from Three Arrows Capital tried to get LayerZero to move all its money to the failed crypto hedge fund before it went bust.
Pellegrino responded to an X post on Thursday, saying that Davies promised the interoperability protocol LayerZero “better rates than other borrowers” in a “last-minute attempt” before the collapse.
The CEO of LayerZero stated, ‘Facing liquidation is one matter, but deceiving and taking advantage of your friends, portfolio companies, and those in your circle is an entirely different issue.’
On the Unchained Podcast, Davies said he wouldn’t apologize to investors for the billions lost in 3AC’s bankruptcy and collapse. He firmly believed his professional reputation wasn’t ruined, even though he faced criticism on social media for things he had done wrong before.
Davies said, “We were traders who always thought things would go up and up. We still think so. But then, lenders decided to take a risk with their clients’ safe money on a risky idea.”
Pellegrino slammed Davies for tricking and using his buddies and partners. He also said 3AC wasn’t financially solid when pitching the deal to LayerZero.
When this was published, Davies hadn’t replied to Pellegrino’s messages on X.
Layerzero: Crypto Chaos Unveiled
In May 2022, Terra collapsed, causing significant turmoil. By July of the same year, a prominent hedge fund manager in the crypto industry, 3AC, declared bankruptcy with over $3 billion in losses due to insufficient cash flow.
Following this setback, Davies and Su Zhu, the co-founders of 3AC, launched Open Exchange (OPNX) in April 2023, a platform specializing in crypto derivatives and claims trading. However, operations on the platform ceased earlier this year, in February.
On Jan 5, 2023, relevant authorities subpoenaed Davies and Zhu via X due to their evasion of communication and unsatisfactory cooperation provided to liquidators.
Zhu faced arrest in Singapore last September and was incarcerated until December due to non-cooperation in 3AC’s liquidation inquiries. On the other hand, Davies managed to evade apprehension.
During a recent podcast, Davies disclosed his avoidance of Singapore to circumvent potential imprisonment.
On Dec 21, a court in the British Virgin Islands held $1.14 billion of Davies and Zhu’s money. Teneo, the 3AC liquidator, wants back $1.3 billion from Zhu and Davies. They say Zhu and Davies borrowed a lot of money from investors after 3AC couldn’t pay its debts.
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