Legal Twist: Three Arrows Capital Co-Founder's Citizenship Renunciation Disrupts Court's Jurisdiction in Bankruptcy Case
In the bankruptcy case of Three Arrows Capital (3AC), a crypto hedge fund that ceased operations, a judge has rejected a request to hold co-founder Kyle Davies in contempt of Court and impose sanctions.
Judge Martin Glenn, in a filing on August 11 at the United States Bankruptcy Court for the Southern District of New York, stated that previous rulings regarding a subpoena issued to Davies through X (formerly Twitter) did not account for the fact that Davies, a co-founder of 3AC, is not a US citizen and resides outside the country.
He cited applicable federal laws for compelling compliance outside the US.
"Until 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," said Glenn.
"Because Mr Davies' 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."
The judge suggested foreign representatives might use Singaporean courts to force Davies to comply. He rejected the contempt motion, stating that the US court couldn't exert much jurisdiction over Mr. Davies.
On August 1, Davies submitted notarized and Apostilled copies of the form renouncing his US citizenship on December 15, 2020, to the US Bankruptcy Court for the Southern District of New York.
He stated that he obtained citizenship in Singapore after receiving a passport in January 2021 and clarified that he would not be under the jurisdiction of US courts.
"Davies has not been, and cannot be, validly served with process as a non-party in this case because
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