Kyle Davies is trying to evade being convicted in contempt of court by alleging that since he relinquished his US citizenship in late 2020, US laws do not apply to him.
Failed 3AC Founder Kyle Davies Renounced US Citizenship
Kyle Davies, co-founder of failed crypto hedge fund Three Arrows Capital, is trying to evade being convicted in contempt of court by alleging that since he relinquished his US citizenship in late 2020, US laws do not apply to him.
The motion was filed after Davies and co-founder Su Zhu refused to comply with the attempt to liquidate their bankrupt hedge fund and reimburse investors billions.
In order to take advantage of the legal protections against creditors offered by US bankruptcy, liquidators in the British Virgin Islands filed the company for Chapter 15 bankruptcy protection in the US.
However, the liquidators in charge of managing the fund's wind-down assert that Davies and Zhu have been withholding important documents for months.
The action taken by Davies and his attorneys raises concerns about the authority of US courts to handle cases involving foreign persons who have forfeited their US citizenship. According to the lawyers, subpoenas in bankruptcy cases "does not allow for service of persons outside the United States who are not U.S. nationals or residents.”
Financial regulators and law enforcement officials in the United States can still take enforcement measures against foreigners who they suspect have committed crimes in the US or involving US citizens or entities. On August 8, there will be a hearing on the motion.
