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LayerZero CEO Accuses Kyle Davies of Seeking Full Treasury Allocation Before 3AC’s Collapse

23.03.2024
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LayerZero co-founder and CEO Bryan Pellegrino accused Kyle Davies, co-founder of the now-defunct Three Arrows Capital (3AC), of trying to persuade his firm to transfer its entire treasury shortly before the liquidation of 3AC on March 21.

Pellegrino made the allegation in an X post as a response to Davies’ comment on a podcast.

Pellegrino Asserts Davies Misled & Exploited Partners

Pellegrino alleged that Davies tried to get the entire treasury of LayerZero, “promising better rates than other borrowers as a last-gasp effort.”

This revelation came to light when the co-founder of the defunct hedge fund refused to apologize to investors for the collapse of 3AC in an episode of the Unchained YouTube interview podcast on March 19.

The LayerZero CEO further claimed that 3AC resolved to borrow funds from various firms, even though the firm knew it was financially unable to pay back the loans amid private preparation for its liquidation.

I would agree with this 100% and would be in your corner except for the fact that you tried to get us to give you our entire treasury promising better rates than other borrowers as a last gasp effort just days before you blew up.

— Bryan Pellegrino (@PrimordialAA) March 21, 2024

Pellegrino criticized Davies for misleading and taking advantage of friends, associates, and partners, including Arthur Hayes, the co-founder of BitMex exchange.

While Pellegrino’s accusations seem deep-rooted in betrayal and soured friendship, he has gained support from many crypto enthusiasts and case observers who believe Davies borrowed funds with false claims.

You borrowed money with fraudulent claims. Thats simple financial fraud, and in a common sense ethical context…simple stealing. Losing other peoples’ money isn’t inherently unethical or illegal. But it’s both when you took their money under false pretenses. Don’t apologize…

— Ari Paul ⛓ (@AriDavidPaul) March 21, 2024

Another X user, @basedkarbon, also slammed Davies for not being tactful with his response.

The Fall of 3AC & Impacts on the Crypto Sphere

Davies and Su Zhu started 3AC in 2012, and the fund reportedly managed an estimated $10 billion in assets as of 2021. But, the value dropped to $3 billion in April 2022.

The major fall in the fortunes of 3AC was attributed to the crash of TerraUSD stablecoins in 2022, which led to a crypto crash that wiped out billions in value.

The now-defunct hedge fund filed for Chapter 15 bankruptcy on July 1, 2022, to protect its assets from creditors.

The 3AC collapse had a severe impact on several investors and companies. This is because 3AC had a lengthy list of early and late counterparties and organizations that had their funds wrapped up with the firm. The bankruptcy filing noted that the hedge fund owed $3.5 billion to 27 companies, including $2.3 billion to Genesis Global Trading.

Additionally, crypto trading platform Blockchain.com faced a $270 million hit on loans to 3AC, while renowned digital asset brokerage Voyager Digital filed for Chapter 11 bankruptcy due to a default on about $670 million in loans made to 3AC.

The post LayerZero CEO Accuses Kyle Davies of Seeking Full Treasury Allocation Before 3AC’s Collapse appeared first on Cryptonews.

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Disclaimer: Information found on CryptoMediaClub is those of writers quoted. It does not represent the opinions of CryptoMediaClub on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoMediaClub covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.

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