Kyle Davies, co-founder of the defunct crypto hedge fund Three Arrows Capital (3AC), has made a commitment to donate future earnings from his latest crypto venture, Open Exchange (OPNX), to the creditors who suffered losses in the collapse of 3AC in 2022. Davies expressed his belief that this act of giving would bring about positive karma. He referred to this proposed arrangement as a “shadow recovery process,” separate from the ongoing official liquidation process overseen by Teneo, a global consulting firm.

Davies claimed that this initiative, which he described as the first of its kind, would enable him and his partner to contribute funds to 3AC creditors, but only if they had supported OPNX early on. He mentioned that there are already several creditors who have been fully compensated and emphasized that those who choose not to participate will not be obligated to do so.

When questioned about his involvement in a new venture while his bankrupt hedge fund was still undergoing liquidation, Davies argued that the creditors would ultimately benefit from the new company.

The launch of OPNX on April 4 stirred controversy, as Davies and his partner faced criticism from some members of the crypto community for embarking on a new venture while seemingly neglecting their responsibilities regarding the collapse of their hedge fund.

3AC filed for Chapter 15 bankruptcy protection on July 1, 2022, and subsequent court documents revealed that the fund owed over $2.8 billion to more than 20 different firms.

The whereabouts of Davies and his partner remain unknown, with liquidators resorting to serving them subpoenas through Twitter on January 5 due to difficulties in locating them. According to a recent report by The New York Times, Davies and his partner have allegedly been spending a significant amount of time surfing in Bali.

Recently, on June 27, liquidators announced their intention to recover a total of $1.3 billion in lost funds directly from Davies himself.