Judge Denies Contempt Motion in Three Arrows Capital Case

Bankruptcy Case Update

In a significant development in the bankruptcy proceedings of the defunct crypto hedge fund Three Arrows Capital (3AC), a judge has denied a motion to hold co-founder Kyle Davies in contempt of court. This decision also prevented the imposition of sanctions on Davies.

Judicial Considerations

The ruling was issued by Judge Martin Glenn of the United States Bankruptcy Court for the Southern District of New York. The case involved a subpoena sent to Davies via a social media platform, X, which was formerly known as Twitter. The court acknowledged that earlier proceedings were based on the incorrect assumption that Davies was a U.S. citizen.

Legal Implications

Judge Glenn highlighted the complexities involved in compelling compliance with subpoenas for individuals residing outside the United States, referencing federal laws pertinent to such situations. The court's earlier motions, dating back to December 2022, were predicated on the belief that Davies held U.S. citizenship. This revelation influenced the current decision not to hold him in contempt.

Conclusion

This recent ruling underscores the intricacies involved in international legal proceedings, particularly in cases involving non-U.S. citizens. The decision marks a critical point in the 3AC bankruptcy case, affecting how future motions and subpoenas might be handled for individuals outside the U.S. jurisdiction.