A judge in the bankruptcy case of defunct crypto hedge fund Three Arrows Capital (3AC) has denied a motion that would have held co-founder Kyle Davies in contempt of court and imposed sanctions.<\/p>\n
In an Aug. 11 filing with the United States Bankruptcy Court for the Southern District of New York, Judge Martin Glenn said rulings on motions regarding a subpoena issued to Davies via X \u2014 formerly Twitter \u2014 were considered without the knowledge the 3AC co-founder was a non-U.S. citizen residing outside the country. He cited federal laws for compelling compliance outside the U.S., adding that his approval of motions starting in December 2022 \u201cpresumed based on the record at that time that Mr. Davies was a United States citizen.\u201d<\/p>\n
On Aug. 1, lawyers for Davies filed evidence that he had applied to\u00a0renounce his U.S. citizenship in December 2020 and had become a citizen of Singapore following his marriage to a national. Singapore does not allow dual nationality. His filing was in response to a contempt motion filed by 3AC\u2019s foreign representatives in the U.S. bankruptcy case for a lack of response to the online subpoena.<\/p>\n
\u201cUntil Mr. Davies filed his Opposition, the Court was operating under the presumption that Mr. Davies was a United States national, and that personal jurisdiction might be established at some point if that presumption continued to hold and other jurisdictional facts were proven,\u201d said Glenn. \u201cBecause Mr. Davies\u2019 United States citizenship was a prerequisite for valid service on him in the manner effected, he was not properly served with the subpoena issued by this Court.\u201d<\/p>\n
The judge hinted that the foreign representatives could consider compelling Davies\u2019 compliance through Singaporean courts. He denied the contempt motion and said the U.S. court could largely not \u201cexercise jurisdiction over Mr. Davies.\u201d<\/p>\n