Three Arrows Capital

OPNX quips about its early dismal volume after reporting 90,000% surge

OPNX exchange has joked about its earlier low trading volume before experiencing a big surge in volume during the last 24 hours.

Open Exchange (OPNX) has claimed to have experienced a massive surge in trading volume and has joked about its dismally low volume on its opening day.

According to an April 10 tweet by OPNX, its day one trading volume on April 4 hit a total of $13.64 but has since apparently seen a surge to $12,398 on April 9, an increase of over 90,000%.

However, new data suggests the trading volume has seen a far bigger increase during the last 24 hours.

According to CoinGecko data, OPNX’s 24-hour trading volume as of April 10 has exploded to over $179,000, representing a gain of around 24,500% since April 9.

The vast majority of the volume has come from the trading pair for Bitcoin (BTC) and Tether (USDT), with more than $178,000 worth coming from the pair.

It’s unclear what exactly sparked the increase but it could be connected to the April 9 announcement from OPNX about a new market-making program to help increase its volume.

OPNX’s trading volumes may also be a result of the steady climb in the price of BTC, which has seen the largest crypto by market cap cruise past $30,000 for the first time since June.

Related: 3AC, Coinflex founders collaborating to raise $25M for new claims trading exchange

OPNX CEO Leslie Lamb announced the exchange was open for business on April 4. The firm is the result of a partnership between the co-founders of crypto investment firm Coinflex and the co-founders of the collapsed hedge fund Three Arrows Capital, Su Zhu and Kyle Davies.

The crypto community has had a mixed response to the unveiling of OPNX and its reported trading volume.

Some comments criticized the exchange’s connection with Davies and Zhu, whose whereabouts have remained unclear since the 2022 collapse of 3AC, which once held $10 billion worth of assets.

Others, meanwhile, ridiculed OPNX’s still relatively low trading volume, joking that Changpeng “CZ” Zhao, the CEO and founder of Binance, would be worried about the project.

In contrast, Binance posted a 24-hour volume of over $11 billion compared to OPNX’s $179,000, as per data from CoinGecko.

Magazine: Zhu Su’s exchange did $13.64 in volume akshually, Huobi in crisis: Asia Express

Crypto exchange backed by 3AC founders launches with claims trading plans

OPNX CEO Leslie Lamb said the exchange planned to launch claims trading aimed at helping users from bankrupt crypto platforms including FTX and Celsius.

Su Zhu and Kyle Davies, founders of the collapsed hedge fund Three Arrows Capital (3AC), have announced the launch of the crypto project Open Exchange, or OPNX.

Both Zhu and Davies retweeted the April 4 launch announcement from OPNX chief executive officer Leslie Lamb, who said the exchange was open to “trade spot and futures immediately.” According to the CEO, the launch of the exchange was aimed at wanting to “help the industry” amid the collapse of platforms including FTX and Celsius.

“Claims trading will be the next thing that we launch, so that these claimants can have an opportunity to be made whole again,” said Lamb.

The exchange, a brainchild of the 3AC co-founders as well as higher-ups from crypto investment platform Coinflex — currently subject to a restructuring plan approved in Seychelles — launched its website in February. Three Arrows Capital, the crypto-friendly hedge fund that once held $10 billion worth of assets, went bust amid the 2022 market crash.

Related: 3AC, Coinflex founders collaborating to raise $25M for new claims trading exchange

Following the collapse of 3AC, Coinflex CEO Mark Lamb and co-founder Sudhu Arumugam later said they would be working with Zhu and Davies to build a new platform, reportedly originally pitched as “GTX” before the team settled on OPNX. Authorities in the United States have also issued a subpoena to Davies via Twitter regarding his alleged role in 3AC’s collapse.

At the time of publication, both Davies’ and Zhu’s whereabouts were unknown. However, both 3AC co-founders have continued to be active on social media channels.

Magazine: $3M OKX airdrop, 1-hour due diligence on 3AC, Binance AI — Asia Express

3AC co-founder can answer subpoena or ‘take his chances’ — US judge

The U.S. judge presiding over the Three Arrows Capital bankruptcy case has upped the pressure on Kyle Davies to comply with a January-issued subpoena.

Kyle Davies, the co-founder of bankrupt crypto hedge fund Three Arrows Capital, has been ordered to answer the subpoena issued to him in January or risk being held in contempt of court.

The Jan. 5 subpoena was issued to Davies via Twitter following approval from a New York bankruptcy court, instructing him to provide 3AC’s liquidators with documents such as seed phrases and private keys as well as company communications and other company-related documents within 14 days.

After failing to hear from Davies, the United States Bankruptcy Judge Martin Glenn granted a motion to compel on March 22, noting that Davies can appear and contest the arguments made by 3AC liquidators, “or he can fail to appear as he has done so far, and, frankly, take his chances.”

A motion to compel is a legal request that the court will compel one party to provide evidence to the party that brought the motion.

People found to be in contempt of court during civil proceedings are usually hit with a fine, but may also be imprisoned. The purpose of civil contempt is to coerce compliance, so the severity of punishments can increase until the order is carried out.

Related: Do Kwon faces fraud charges from US prosecutors hours after arrest

The current whereabouts of both Kyle Davies and fellow 3AC co-founder Su Zhu remains unknown.

Davies’s most recent tweet, on March 23, appears to show a photograph of him in Bali. However, an earlier tweet from the same day shows him standing with Su Zhu and one other person in Bahrain.

Su Zhu also shared a tweet with a recognizable landmark in the background on the same day, however, suggesting he may be or have recently been in Dubai.

According to lawyers for 3AC’s liquidators, Davies has “chosen to ignore his duties to Three Arrows.”

Meanwhile, the pair from 3AC has teamed up with CoinFLEX to launch OPNX, a marketplace aimed at enabling claims in crypto firm bankruptcy proceedings to be bought and sold. 

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips

3AC founder has ‘chosen to ignore his duties’ by not responding to subpoena, say bankruptcy lawyers

According to the filing, Kyle Davies was “without question” aware of the subpoena posted to Twitter, citing the 3AC founder’s online activity and attempts to raise funds for GTX.

Three Arrows Capital founder Kyle Davies has not responded to a subpoena issued over Twitter aiming to gather information related to the firm’s assets.

In a Feb. 7 filing with United States Bankruptcy Court in the Southern District of New York, lawyers with the Latham & Watkins firm representing 3AC liquidators said Davies had “chosen to ignore his duties to Three Arrows” by failing to comply with the online subpoena.

Courts in Singapore and the U.S. previously authorized the use of Twitter to issue subpoenas, due to the whereabouts of 3AC founders Davies and Su Zhu being unconfirmed while their social media presence remained active.

The subpoena, which was tweeted to a newly created account on Jan. 5, ordered Davies to provide the 3AC liquidators with documents related to accessing account information, including seed phrases and private keys. In addition, the court told the 3AC founder to include details on accounts at centralized or decentralized exchanges and other assets.

“Under the terms of the Subpoena Order and the Subpoena, Mr. Davies was required to respond by electronic production to counsel for the Foreign Representatives by January 26, 2023,” said the filing. “He did not.”

According to the filing, Davies may have based in Indonesia, but was making himself available for interviews and was “without question” aware of the subpoena posted to Twitter:

“Mr. Davies has been active on social media, having ‘tweeted’ or ‘retweeted’ dozens of times on Twitter. Shamelessly, while ducking his obligations to his failed company, Mr. Davies has been recently active in an effort to raise tens of millions to start a new crypto exchange called ‘GTX.’”

Related: 3AC, Coinflex founders collaborating to raise $25M for new claims trading exchange

Bankruptcy Judge Martin Glenn granted a motion aimed at compelling Davies to respond to the online subpoena. According to the judge, the 3AC founder will have until March 16 to respond by providing documents related to the bankruptcy case. In addition, the filing included an order from a British Virgin Islands court compelling Davies to provide documents and appear in a March 14 virtual hearing.

3AC declared bankruptcy in July, shortly before Davies and Zhu largely disappeared from the public spotlight. The Singapore-based crypto hedge fund had at one point managed more than $10 billion worth of assets.

3AC subpoenas issued as dispute grows over claims of Terraform dump

The bankruptcy judge has given approvals to subpoenas aimed at Three Arrows Capital’s leadership, while a new Terra Luna conspiracy has been floated.

A federal judge overseeing Three Arrows Capital’s (3AC’s) bankruptcy proceedings has signed an order approving subpoenas to be delivered to 3AC’s former leadership, including co-founders Su Zhu and Kyle Davies.

The subpoenas require the founders to give up any “recorded information, including books, documents, records, and papers” in their custody that relates to the firm’s property or financial affairs.

The infamous hedge fund, worth $10 billion at its peak, filed for Chapter 15 bankruptcy on Jul. 1 with its troubles tied up in too much leverage and the collapse of Terra Luna (LUNA), known now as Terra Classic (LUNC), and its algorithmic stablecoin formerly known as TerraUSD (UST).

Since then, the liquidators — advisory firm Teneo — have been trying to hunt down the firm’s assets and pin down the 3AC’s co-founders.

The latest order allowing for the subpoenas will require recipients to give up any and all account information, seed phrases, and private keys for its digital and fiat assets, details about the securities and unregistered shares, and any accounts held on centralized or decentralized exchanges, along with any other tangible or intangible assets.

The order also labels hedge fund attorney Hannah Terhune, directors Mark Dubois and Cheuk Yao Pau, and Kelly Chen — wife of co-founder Kyle Davies — as “discovery targets”, alongside trading desk company Tai Ping Shan Limited, venture capital firm DeFiance Capital, 3AC-backed NFT fund Starry Night Capital and all of their associates.

Related: Legal team for 3AC liquidators blast founders for shifting blame to FTX, media blitz amid bankruptcy

Any individuals served with the subpoena are required to comply within 14 days unless otherwise agreed with the parties.

At the time of writing there has been no solid information on the whereabouts of either Zhu or Davies, it’s rumored Zhu is residing in Dubai while Davies is residing on the Indonesian island of Bali. Both have been active on social media commenting on developments relating to the collapse of FTX and Alameda research.

Claim: Terraform dumped $450M UST before crash

Meanwhile, self-proclaimed Terra whistleblower FatMan has made new claims on Twitter that it was the actions of Terraform Labs itself that led to the de-pegging of TerraUSD (UST), now TerraClassicUSD (USTC), in May — as opposed to a concerted attack.

That being said, not everyone is convinced about the theory or that the information is new.

In a Dec. 6 Twitter thread FatMan cited “bombshell data” from anonymous researcher Cycle_22 that purportedly discovered two trading wallets which are verified to be owned by Terraform Labs had “dumped” $450 million worth of UST on the open market in the three weeks leading up to the de-peg, explaining:

“TFL has been perpetrating the narrative that UST was ‘attacked.’ This is a false flag.”

“In reality, TFL themselves weakened the Curve pool by irresponsibly dumping a massive amount of UST in a short timeframe. This reduced liquidity and severely weakened the peg,” FatMan said.

However, some Twitter users responding to the thread have stated it was “public knowledge” that TFL was withdrawing UST from a Curve liquidity pool (3Pool) in preparation to seed its new stablecoin liquidity pool (4Pool) it was working with Frax Finance at the time.

Others, such as Twitter user RyanLion said it had been “clearly communicated” that the UST swaps into the curve pool were part of moves of swapping UST into other stables to purchase Bitcoin (BTC) for the Luna Foundation Guard reserves.

A June blog from blockchain firm Chainalysis said that while Terraform Labs withdrew millions of UST from 3Pool at the time (approximately 150 million), it was the actions of two traders in the hour following — swapping a total of 185 million UST for USDC and TFL’s response to that, which led to the depeg and resulting panic sell-off.

Legal team for 3AC liquidators blast founders for shifting blame to FTX, media blitz amid bankruptcy

In a bankruptcy court hearing, lawyers for 3AC creditors asserted the firm’s founders “repeatedly fail to engage” with liquidators but weren’t shy about talking to the media.

The founders of Three Arrows Capital, or 3AC, the Singapore-based crypto hedge fund with close ties to Terra Labs, have been spending more time engaging on social media and news outlets than dealing with its own liquidation, according to bankruptcy lawyers.

In a Dec. 2 hearing in the United States Bankruptcy Court in the Southern District of New York, lawyers for 3AC’s liquidators cited founders Zhu Su and Kylie Davies for being “active and responsive to comments via Twitter” but “repeatedly fail[ing] to engage” with liquidators to discuss the company’s assets and related issues. According to the legal team, Zhu and Davies have only had “limited discussions” with liquidators in addition to changing jurisdictions often — reportedly traveling to Bali and the United Arab Emirates.

Adam Goldberg, a lawyer with Latham and Watkins representing 3AC liquidators through advisory firm Teneo, added the founders had spoken to reporters with CNBC and Bloomberg “in an apparent effort to rehabilitate their reputations” and took advantage of another major crypto firm going belly up:

“Since the collapse of FTX, Mr. Davies has appeared on CNBC and both of the founders have been very active on Twitter, calling out FTX and advancing the theory that FTX caused the debtors’ collapse. It’s interesting, to say the least, that the first time we’ve heard this theory that FTX caused the downfall of this debtor was after FTX’s own sensational collapse.”

Goldberg pointed to “ironic” behavior from both Zhu and Davies, who have tweeted calls to former FTX CEO Sam Bankman-Fried to “reveal the truth” while seemingly sidestepping responsibility for 3AC creditors. He hinted at methods seeking to compel both the 3AC founders into complying with court proceedings, likely an extension of proposing an “alternative means” to subpoena Zhu and Davies in October. At the time of publication, it was unclear where the 3AC founders were located. 

Related: 3AC founders reveal ties to Terra founder, blame overconfidence for collapse

3AC filed for a Chapter 15 bankruptcy on July 1 in New York bankruptcy court. The firm, at one point, managed more than $10 billion worth of assets, and its liquidation has likely contributed to the ongoing crypto bear market. In the wake of its collapse, crypto lending firms including Voyager Digital, Celsius Network, BlockFi and FTX have all reported liquidity issues eventually leading to bankruptcy filings.

3AC liquidators seek ‘alternative means’ to subpoena missing founders

Advisory firm Teneo argued that standard methods to contact the Three Arrows Capital founders have failed, and is now looking for other ways to subpoena them.

Liquidators for Three Arrows capital (3AC) have asked a United States court to grant them permission to subpoena the embattled crypto hedge fund’s founders through “alternative means.”

To this date, the whereabouts of Three Arrows Capital founders Su Zhu and Kyle Davies remains unknown, with some accusing the duo of being on the run.

In a court motion filed to the United States Bankruptcy Court Southern District of New York on Oct. 14, advisory firm Teneo claimed that standard methods to contact the duo have failed as the “Founders’ whereabouts remain unknown.”

It also said that the request for Advocatus Law LLP, the “Singapore counsel purporting to represent the Founders,” has declined to accept the subpoenas on behalf of the pair, adding that the founders have also “yet to offer any forthright cooperation” having “only made themselves directly available for two brief discussions” since proceedings began.

As a result, the liquidators had asked the court to use “alternative means” to serve subpoenas, which is understood to include reaching out to the duo on their Twitter accounts and email addresses.

With the filing of this new motion, liquidators say they seek the “authority to serve subpoenas for the production of documents and testimony on the Founders, the Investment Managers, and third parties.”

Meanwhile, an Oct.18 report from Bloomberg claims U.S. regulators are launching a probe into possible legal violations by the Singapore-based hedge fund.

Bloomberg alleges the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) are now investigating whether 3AC misled investors and failed to register with the appropriate agencies.

Both Zhu and Davies have been keeping a low profile in the wake of 3AC’s insolvency in June. 

3AC filed for a Chapter 15 bankruptcy on Jul. 1 in a New York court. However, Zhu and Davies’ current location has never been disclosed.

Zhu resurfaced briefly on Twitter in July when he accused liquidators of “baiting“ them for information to use in court, with Davies retweeting the post, but the duo has gone radio silent again since then.

3AC managed billions in assets at one point but became another crypto firm to go bankrupt during the bear market after the broad sell-off in digital assets spurred in part by the collapse of the Terra blockchain and alleged poor management decisions on their part.

Three Arrows Capital fund moves over 300 NFTs to a new address

According to blockchain provider Nansen, hundreds of NFTs have been moved from the 3AC-linked fund to a Gnosis Safe address.

Starry Night Capital, a nonfungible token (NFT)-focused fund launched by the co-founders of the now-bankrupt hedge fund Three Arrows Capital (3AC), has moved over 300 NFTs out of its address, according to reports. 

Starry Night Capital was founded last year by Su Zhu, Kyle Davies and pseudonymous NFT collector Vincent Van Dough. At the time, the fund planned to exclusively invest in “the most desired” NFTs on the market.

Blockchain data provider Nansen on Oct. 4 on Twitter noted that the NFTs were reportedly shifted from a wallet associated with the fund, including Pepe the Frog NFT Genesis, which sold for 1,000 Ether (ETH) in October last year, worth $3.5 million at the time. 

Nansen said the NFTs previously collected by Starry Night Capital are moving to a Gnosis Safe address. 

Gnosis Safe is a platform used to manage digital assets on Ethereum, giving users complete self-custody over funds and digital assets.

A report from Bloomberg estimates that the Starry Night Capital collection’s total value sits at around $35 million.

It comes months after the Singapore-based crypto hedge fund 3AC was ordered into liquidation by a court in the British Virgin Islands, leading to the appointment of liquidation firm Teneo, which has gained control of at least $40 million of 3AC assets so far, Cointelegraph reported in August. 

That sum, however, accounts for only a tiny fraction of the 3AC’s debt to its creditors, which amounts to at least $2.8 billion.

The NFT transfers came almost four months after Starry Night Capital’s main crypto wallet moved almost all of its digital tokens to a new address. 

The Singapore-based crypto hedge fund became one of the many crypto firms that went bankrupt following the collapse of the Terra ecosystem earlier this year. The company, which once had over $10 billion in assets under management, eventually filed for a Chapter 15 bankruptcy on July 1 in a New York court.

FTX US wins auction for Voyager Digital’s assets

Voyager hints that its customers will eventually transition to the FTX platform after it finishes its Chapter 11 bankruptcy proceedings.

Cryptocurrency exchange FTX US has secured the winning bid for the assets of crypto brokerage firm Voyager Digital, to be approved by the United States Bankruptcy Court, with a bid valued at approximately $1.4 billion, according to Voyager.

Voyager said the bid was made up of the fair market value of its crypto holdings “at a to-be-determined date in the future” estimated to be around $1.3 billion along with $111 million of what it says is “incremental value,” but did not provide further details.

Little information was given regarding what will happen to Voyager customers still awaiting access to their crypto holdings, with Voyager stating additional information about crypto access “will be shared as it becomes available.”

Voyager only mentioned that the FTX US platform “will enable customers to trade and store cryptocurrency after the conclusion of the company’s chapter 11 cases.“

Cointelegraph contacted FTX and Voyager Digital for further comment but did not immediately hear back.

The sale of the assets is set to be completed after a chapter 11 plan, and an asset purchase agreement is submitted for approval by the U.S. Bankruptcy Court for the Southern District of New York on Oct. 19.

Cointelegraph earlier reported that crypto platforms Binance and CrossTower also submitted bids alongside FTX to acquire Voyager’s assets, each proposing their own terms.

A source claimed Voyager customers would receive their pro rata share of crypto assets and transition to the FTX platform if its bid was successful.

Related: Sam Bankman-Fried denies report FTX plans to purchase stake in Huobi

Voyager entered into a Chapter 11 bankruptcy on July 5, sometimes called a “reorganization” bankruptcy, it allows a firm to retain control of its assets and continue operating whilst it plans to restructure or sell the business.

The filing was for an insolvency worth over $1 billion after crypto hedge fund Three Arrows Capital (3AC) defaulted on a $650 million loan from the firm, Voyager says its claims against 3AC remain with the bankruptcy estate.

The company maintains its chapter 11 filing was “aimed at returning maximum value to customers” and also considered a reorganization, but stated the sale to FTX US was the “best alternative for Voyager stakeholders.”

Celsius, 3AC demonstrated why more financial activity needs to be on-chain

Instead of operating in darkness, more players in the financial industry should move their transactions to the blockchain, where every move is public.

While mainstream coverage of cryptocurrency has been overwhelmingly negative in the wake of the collapse of the Terra ecosystem, the bankruptcy of Celsius and the fall of Three Arrows Capital, these events ultimately show why more of the financial system should operate on-chain, bringing more transparency and information to market participants.

In all three cases, the damage was caused and exacerbated by opaque, off-chain entities. And while the reason for the trio of events is important, it has also caused considerable damage to the overall reputation of the industry. These events have made it clear that the industry is in need of more transparency, something that can be made possible with more on-chain data and data analysis tools.

Proponents of blockchain technologies often tout their transparency: the networks are treasure troves of open, incorruptible financial data allowing for economic activity to be measured with an unprecedented degree of accuracy. This new technology creates immutable records of all transactions where sentiment and investor behavior can be measured through the collection and study of data.

On-chain data gives us insight into market events 

On-chain data analysis has become essential in the blockchain space. By looking at transaction data and crypto wallet balances, we can gather valuable insights into market conditions. This is crucial for participants and investors trying to plan their next move. Not only does data tell a story of the market’s past, but it allows each and every investor to make an informed decision before initiating any trades or interacting with the market.

Related: A $10B hedge fund gone bust with founders on the run

The importance of analytics platforms has become more apparent than ever before — they are essential for learning from our mistakes and understanding weaknesses within the blockchain ecosystem. The events leading up to Celsius’ collapse and the unveiling of 3AC’s holdings were researched and analyzed thoroughly by analysts and media alike. Research has helped specifically to paint a picture that outlined where the contagion started and how it spread. This was only possible because some of that data was on-chain. If 3AC and Celsius had a full picture of their holdings on-chain — similar to a platform such as Aave which anyone can audit and verify collateralization — fewer investors and creditors may have been duped.

Similarly, on-chain intelligence plays a role in real-time market movements, not just in analyzing the past. Data that provides users near real-time information about the movements and positions of the industry’s most important and largest players proved to be essential when Terra USD (UST) lost its peg. Organizations with insights into this data managed to avoid the worst of the UST de-peg.

Leveling the playing field

Leveling the playing field

On-chain analysis offers the promise of equal access to information and is not based on hype, sentiment, or technical analysis. This type of analysis can be focused exclusively on data, where the major benefit of on-chain metrics is that they explain investor behavior and network health in real-time. Additionally, on-chain data levels the playing field by making the strategies and activities of top participants public knowledge.

Related: Crypto Biz: The 3AC saga takes another bizarre twist

Transparent data is a core feature of blockchain networks. While the collapse of Luna, 3AC, Celsius and others was treated as a validation of the belief that it is an ecosystem of “shadowy super-coders” where criminals and scams flourish, the reality is that these entities only managed to harm investors because such large elements of their operations were off-chain.

Ultimately, the antidote to crypto contagion is not regulation or law enforcement, but in bringing more financial infrastructure on-chain where it can be analyzed and used by the wider public.

John Calabrese is the head of product at Nansen, a blockchain-analytics firm. He holds more than 10 years of experience in product management and previously worked for companies in the finance technology space including FIS and Fidelity, and at startups such as Cinch and Monit. John has roots in traditional finance, earning his CFA and FRM designations, but is most passionate about the future of finance where products are more decentralized, transparent, and efficient through blockchain technology. When not working or trading crypto, John can be found at home spending time with his Shiba Inu, Nutmeg.

The opinions expressed are the author’s alone and do not necessarily reflect the views of Cointelegraph. This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice.