LayerZero CEO Bryan Pellegrino has accused Kyle Davies from Three Arrows Capital of attempting to convince LayerZero to transfer its entire treasury to the now-defunct crypto hedge fund just before its collapse. Pellegrino made this claim in response to a post on X, asserting that Davies offered better rates to LayerZero in a last-ditch effort prior to the collapse. Pellegrino condemned Davies for lying and taking advantage of friends and associates. Davies, on the other hand, has refused to apologize for the billions lost in 3AC’s bankruptcy and remains confident in his professional reputation. Pellegrino criticized Davies for deceiving others and taking advantage of them, stating that 3AC was financially unstable when proposing the arrangement to LayerZero. Davies has not responded to Pellegrino’s posts on X as of now. Following the collapse of Terra in May 2022, 3AC filed for Chapter 15 bankruptcy in July of the same year due to liquidity challenges. Davies and Su Zhu, the co-founders of 3AC, launched Open Exchange (OPNX), a platform for crypto derivatives and claims trading, in April 2023. However, the platform ceased operations in February of this year. Davies and Zhu were subpoenaed via X on January 5, 2023, for avoiding communication with authorities and failing to cooperate with liquidators. Zhu was arrested in Singapore last September and was imprisoned until December for non-cooperation in 3AC’s liquidation inquiries. Davies, however, managed to avoid apprehension. A court in the British Virgin Islands froze $1.14 billion worth of Davies and Zhu’s assets on December 21. 3AC liquidator Teneo is seeking to recover $1.3 billion directly from Zhu and Davies, alleging that they took on significant leverage with investor funds after 3AC became insolvent.
LayerZero CEO alleges that Kyle Davies requested complete treasury allocation just days prior to the downfall of 3AC.