Benzinga - The co-founder of the collapsed crypto fund Three Arrows Capital (3AC) says FTX founder Sam Bankman-Fried was allegedly “hunting” the fund's positions and colluding to bring it down.
Kyle Davies on Wednesday said he was the biggest critic of the collapsed crypto exchange in its early days and only associated himself with the exchange after it received backing from prominent firms.
Speaking to CNBC from Bali, the beleaguered founder also said he was in constant touch with liquidators, attending their every call and email, and doing video interactions with them to cooperate in every possible way.
“We are here, we are cooperating. We are some of the biggest creditors ourselves,” he said.
He added that when his firm collapsed, Bankman-Fried was one of his biggest critics, noting that it has come to light only now that he was covering up a lot of things himself.
Also read: Bahamas Arm Of Cryptocurrency Exchange FTX Files For Chapter 15 Bankruptcy: What It Means For Creditors
Looking Forward To Justice
“It is also coming out that he hunted our positions. We will find out in time, and we are looking forward to justice,” Davies said.
Referring to FTX’s sister firm Alameda Research, he said that there should be a clear segregation between the exchange and any kind of proprietary trading firm, which was not the case here.
“From the early days, we were their biggest critic. I didn't even trade on their exchange, for the first year and a half. But as they got bigger and bigger and we saw some of their backers, we assumed that they cleaned up their act, and we were just wrong,” Davies acknowledged.
CNBC said it had a statement from Bankman-Fried, who responded, “I’m shocked. 100% disagree ... there’s no truth to their allegations here.”
3AC Investigated By Regulators
Following the bankruptcy of Three Arrows Capital, investigations are underway by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) to ascertain if the fund violated rules by misrepresenting the health of its balance sheet to investors and failing to register with the authorities.
Prior to declaring Chapter 15 bankruptcy on July 1, the Singapore-based fund, which started actively trading cryptocurrencies in 2017, was one of the biggest cryptocurrency funds in the world, claiming that it owed $3.5 billion to creditors as a result of its collapse.
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