The co-founders of collapsed crypto hedge fund Three Arrows Capital (3AC) have pledged to donate a portion of the proceeds of their latest crypto venture to creditors who lost money when the fund collapsed in 2022.

On Twitter dated July 3 Space3AC co-founder Kyle Davies said it would be “good karma” to “donate” potential earnings from Open Exchange (OPNX) to 3AC’s creditors.

Davies described the proposed repayment scheme as a “shadow recovery process” that would be independent official liquidation process he currently manages the global consultancy Teneo.

Davies touted the process as the “first” of its kind, claiming it would allow him and Su to donate funds to 3AC’s creditors, but only if they were “early and supportive” of OPNX.

He claimed there were already “several creditors” who had been consolidated. “If there are some who don’t want to deal with us, then they don’t have to,” he added.

“We strongly believe that if we do good and tell creditors who have lost money, they have a way to get more back. If we do bad and they do good, that’s great. And that’s good karma, or whatever you call it.”

When pressed on how he could work on the new venture while his now-bankrupt hedge fund was still in the middle of liquidation, Davies argued that creditors would only “benefit” from the new company.

OPNX shrouded in controversy

Davies and Su courted controversy when they announced the launch of OPNX April 4, when some members of the crypto community criticized the pair for coming up with a new venture while seemingly shirking their responsibility in the collapse of their hedge fund.

3AC filed for Chapter 15 bankruptcy protection on July 1, 2022, with subsequent court documents revealing that it had collapsed the fund owes approximately $2.8 billion for more than 20 different companies.

The position of the couple remains unconfirmed, liquidators are even forced serve them with a summons via Twitter on January 5 due to difficulties in tracking them down. A recent New York Times message claims that Davies and Su spent most of their time surfing in Bali.

Last June 27 liquidators they announced that they are trying to recover a total of $1.3 billion in lost funds from Davies and personally.

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