3AC co-founder rejects jurisdiction of bankruptcy court, claiming he renounced US citizenship
Kyle Davies, the co-founder of bankrupt crypto hedge fund Three Arrows Capital (3AC), has submitted documentation to court claiming he is fully a citizen of Singapore and not the United States.
In an Aug. 1 filing with U.S. Bankruptcy Court for the Southern District of New York, Davies provided notarized and Apostilled copies of the form applying for the renunciation of his U.S. citizenship on Dec. 15, 2020. He claimed to have received citizenship to Singapore following the issuance of a passport in January 2021 and was not “subjecting [him]self to, or accepting the jurisdiction of, the Courts in the United States.”
Court filings showed Davies renounced his citizenship at the U.S. Embassy in Singapore, citing his decision to live in the country long-term. He said he got married in 2017 to a Singaporean national, gained permanent residency, and has two children in the country. As Singapore does not allow dual nationality, he chose to renounce his U.S. citizenship.
The filing from Davies followed a subpoena issued at the request of 3AC liquidators aimed at gaining information on the collapse of the crypto hedge fund. Both Davies and 3AC co-founder Su Zhu were subpoenaed on Twitter — now X — in January due to their physical whereabouts being unknown, but parties have argued Davies should be held in contempt of court after he ignored the order. Zhu, a Singaporean national, would likely not be subject to the subpoena if residing outside the United States.
“Davies has not been, and cannot be, validly served with process as a non-party in this case because he has not been a United States citizen or resident since well before this case was commenced,” said an Aug. 1 filing. “Since Davies has not been validly served, the Court does not have personal jurisdiction over him. The Service Order and Compel Order were premised on the incorrect presumption that Davies is a U.S. citizen, and therefore they should be vacated.”
Related: Kyle Davies to donate future OPNX earnings to 3AC creditors for ‘karma’
The whereabouts of both Zhu and Davies following the bankruptcy filing for 3AC in July 2022 has been the subject of mass speculation and debate among crypto users affected by the market crash. Lawyers have appeared before the bankruptcy court on Davies’ behalf, but the revelation of his lack of U.S. citizenship could complicate legal proceedings. The bankruptcy court will hold a hearing on Aug. 8 to discuss the matter.
Liquidators behind 3AC are seeking to recover roughly $1.3 billion in funds from Zhu and Davies, with the firm reportedly owing creditors $3.5 billion. Amid online ire surrounding the events leading to the collapse of 3AC, Zhu and Davies launched a platform for trading claims against bankrupt crypto firms called Open Exchange. Sotheby’s has also auctioned off several pieces from a nonfungible token collection formerly owned by the 3AC founders.
Magazine: 3AC cooks up a storm, Bitcoin miner surges 360%, Bruce Lee NFTs dive: Asia Express
Politics
Sir Keir Starmer says US-UK trade talks ‘well advanced’ and rejects ‘knee-jerk’ response to Donald Trump tariffs
Sir Keir Starmer has said US-UK trade talks are “well advanced” ahead of tariffs expected to be imposed by Donald Trump on the UK this week – but rejected a “knee-jerk” response.
Speaking to Sky News political editor Beth Rigby, the prime minister said the UK is “working hard on an economic deal” with the US and said “rapid progress” has been made on it ahead of tariffs expected to be imposed on Wednesday.
But, he admitted: “Look, the likelihood is there will be tariffs. Nobody welcomes that, nobody wants a trade war.
“But I have to act in the national interest and that means all options have to remain on the table.”
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Sir Keir added: “We are discussing economic deals. We’re well advanced.
“These would normally take months or years, and in a matter of weeks, we’ve got well advanced in those discussions, so I think that a calm approach, a collected approach, not a knee-jerk approach, is what’s needed in the best interests of our country.”
Downing Street said on Monday the UK is expecting to be hit by new US tariffs on Wednesday – branded “liberation day” by the US president – as a deal to exempt British goods would not be reached in time.
A 25% levy on car and car parts had already been announced but the new tariffs are expected to cover all exports to the US.
Jonathan Reynolds, the business and trade secretary, earlier told Sky News he is “hopeful” the tariffs can be reversed soon.
But he warned: “The longer we don’t have a potential resolution, the more we will have to consider our own position in relation to [tariffs], precluding retaliatory tariffs.”
He added the government was taking a “calm-headed” approach in the hope a deal can be agreed but said it is only “reasonable” retaliatory tariffs are an option, echoing Sir Keir’s sentiments over the weekend.
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Donald Trump speaks to reporters aboard Air Force One on Sunday. Pic: Reuters
Tariff announcement on Wednesday
Mr Trump has been threatening tariffs – import taxes – on countries with the biggest trade imbalances with the US.
However, over the weekend, he suggested the tariffs would hit all countries, but did not name them or reveal which industries would be targeted.
Read more: How Trump’s tariffs could affect the UK
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‘Everything on table over US tariffs’
Mr Trump will unveil his tariff plan on Wednesday afternoon at the first Rose Garden news conference of his second term, the White House press secretary said.
“Wednesday, it will be Liberation Day in America, as President Trump has so proudly dubbed it,” Karoline Leavitt said.
“The president will be announcing a tariff plan that will roll back the unfair trade practices that have been ripping off our country for decades. He’s doing this in the best interest of the American worker.”
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Trump’s tariffs: What can we expect?
Tariffs would cut UK economy by 1%
UK government forecaster the Office for Budget Responsibility (OBR) said a 20 percentage point increase in tariffs on UK goods and services would cut the size of the British economy by 1% and force tax rises this autumn.
Global markets remained flat or down on Monday in anticipation of the tariffs, with the FTSE 100 stock exchange trading about 1.3% lower on Monday, closing with a 0.9% loss.
On Wall Street, the S&P 500 rose 0.6% after a volatile day which saw it down as much as 1.7% in the morning.
However, the FTSE 100 is expected to open about 0.4% higher on Tuesday, while Asian markets also steadied, with Tokyo’s Nikkei 225 broadly unchanged after a 4% slump yesterday.
Kristin Smith, CEO of the US-based Blockchain Association, will be leaving the cryptocurrency advocacy group for the recently launched Solana Policy Institute.
In an April 1 notice, the Blockchain Association (BA) said Smith would be stepping down from her role as CEO on May 16. According to the association, the soon-to-be former CEO will become president of the Solana Policy Institute on May 19.
The association’s notice did not provide an apparent reason for the move to the Solana advocacy organization nor say who would lead the group after Smith’s departure. Cointelegraph reached out to the Blockchain Association for comment but did not receive a response at the time of publication.
Blockchain Association CEO Kristin Smith’s April 1 announcement. Source: LinkedIn
Smith, who has worked at the BA since 2018 and was deputy chief of staff for former Montana Representative Denny Rehberg, will follow DeFi Education Fund CEO Miller Whitehouse-Levine, leaving his position to join the Solana Policy Institute as CEO. According to Whitehouse-Levine, the organization plans to educate US policymakers on Solana.
Related: Congress on track for stablecoin, market structure bills by August: Blockchain Association
With members from the crypto industry, including Coinbase, Ripple Labs, and Chainlink Labs, the BA has filed a lawsuit against the US Internal Revenue Service, challenging regulations requiring brokers to report crypto transactions. The group often criticized the US Securities and Exchange Commission under former chair Gary Gensler for its “regulation by enforcement” approach to crypto, resulting in steep legal fees for many companies.
Less than 48 hours after the Solana Policy Institute’s launch, it’s unclear what the group’s immediate goals may be for engaging with US lawmakers and advocating for the industry. The organization described itself as a non-partisan nonprofit group.
Magazine: Solana ‘will be a trillion-dollar asset’: Mert Mumtaz, X Hall of Flame
The most senior and long-serving civil servants could be offered a maximum of £95,000 to quit their jobs as part of a government efficiency drive.
Sky News reported last week that several government departments had started voluntary exit schemes for staff in a bid to make savings, including the Department for Environment and Rural Affairs, the Foreign Office and the Cabinet Office.
The Department for Health and Social Care and the Ministry of Housing and Local Government have yet to start schemes but it is expected they will, with the former already set to lose staff following the abolition of NHS England that was announced earlier this month.
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Rachel Reeves, the chancellor, confirmed in last week’s spring statement that the government was setting aside £150m to fund the voluntary exit schemes, which differ from voluntary redundancy in that they offer departments more flexibility around the terms offered to departing staff.
Ms Reeves said the funding would enable departments to reduce staffing numbers over the next two years, creating “significant savings” on staff employment costs.
A maximum limit for departing staff is usually set at one month per year of service capped at 21 months of pay or £95,000.
Whitehall sources stressed the figure was “very much the maximum that could be offered” given that the average civil service salary is just over £30,000 per year.
Whitehall departments will need to bid for the money provided at the spring statement and match the £150m from their own budgets, bringing the total funding to £300m.
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Spring statement 2025 key takeaways
The Cabinet Office is understood to be targeting 400 employees in a scheme that was announced last year and will continue to run over this year.
A spokesman said each application to the scheme would be examined on a case-by-case basis to ensure “we retain critical skills and experience”.
It is up to each government department to decide how they operate their scheme.
The voluntary exit schemes form part of the government’s ambition to reduce bureaucracy and make the state more efficient amid a gloomy economic backdrop.
Ahead of the spring statement, Ms Reeves announced plans to cut civil service running costs by 15% by 2030, which ministers have said will save £2.2bn.
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The move could result in 10,000 civil service jobs being axed after numbers ballooned during the pandemic.
Ms Reeves hopes the cuts, which she said will be to “back office jobs” rather than frontline services, but civil service unions have raised concerns that government departments will inevitably lose skilled and experienced staff.
The cuts form part of a wider government agenda to streamline the civil service and the size of the British state, which Sir Keir Starmer criticised as “weaker than it has ever been”.
During the same speech, he announced that NHS England, the administrative body that runs the NHS, would also be scrapped to eliminate duplication and cut costs.
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