LayerZero CEO Accuses Kyle Davies of Misleading and Exploiting Partners
LayerZero co-founder and CEO Bryan Pellegrino recently made allegations against Kyle Davies, the co-founder of the now-defunct Three Arrows Capital (3AC). Pellegrino accused Davies of attempting to persuade LayerZero to transfer its entire treasury shortly before the liquidation of 3AC.
This accusation came in response to Davies’ comments during an episode of the Unchained YouTube interview podcast. During the podcast, Davies refused to apologize to investors for the collapse of 3AC.
Pellegrino’s Allegations
Pellegrino claimed that Davies tried to convince LayerZero to give up its entire treasury, promising better rates than other borrowers as a desperate last-minute effort. He further alleged that 3AC borrowed funds from various firms despite knowing its financial instability and impending liquidation.
“I would agree with this 100% and would be in your corner except for the fact that you tried to get us to give you our entire treasury promising better rates than other borrowers as a last gasp effort just days before you blew up.” – Bryan Pellegrino
Pellegrino also criticized Davies for misleading and taking advantage of friends, associates, and partners, including Arthur Hayes, the co-founder of BitMex exchange. Many crypto enthusiasts and observers have shown support for Pellegrino’s accusations, believing that Davies borrowed funds under false pretenses.
The Fall of Three Arrows Capital and Its Impact on the Crypto Sphere
Davies and Su Zhu founded Three Arrows Capital in 2012, managing an estimated $10 billion in assets by 2021. However, the value dropped significantly to $3 billion in April 2022. The crash of TerraUSD stablecoins in 2022 was a major factor in the decline of 3AC’s fortunes, leading to a crypto crash that wiped out billions in value.
As a result, Three Arrows Capital filed for Chapter 15 bankruptcy on July 1, 2022, to protect its assets from creditors. This collapse had severe repercussions for numerous investors and companies involved with the firm.
Impact on Investors and Companies
The bankruptcy filing revealed that Three Arrows Capital owed $3.5 billion to 27 companies, including $2.3 billion to Genesis Global Trading. Some of the notable impacts include:
- Crypto trading platform Blockchain.com faced a $270 million loss on loans to 3AC.
- Digital asset brokerage Voyager Digital filed for Chapter 11 bankruptcy due to a default on approximately $670 million in loans made to 3AC.
Hot Take: LayerZero CEO Exposes Alleged Misconduct by Kyle Davies
In a recent series of accusations, LayerZero CEO Bryan Pellegrino accused Kyle Davies, co-founder of Three Arrows Capital, of misleading and exploiting partners. Pellegrino alleged that Davies attempted to persuade LayerZero to transfer its entire treasury shortly before the collapse of Three Arrows Capital.
This revelation came after Davies’ refusal to apologize for the collapse during an interview podcast. Pellegrino criticized Davies for his actions, claiming that he misled and took advantage of friends and associates.
The fall of Three Arrows Capital had significant consequences for investors and companies involved with the firm. The bankruptcy filing revealed substantial debts owed to various organizations, leading to financial losses and even bankruptcies for some.
It remains to be seen how these allegations and the collapse of Three Arrows Capital will impact the crypto industry as a whole.
Sources: Twitter, Crypto News, Fortune, Document Cloud, Crypto News, PR Newswire
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