3AC co-founder Kyle Davies tells a US court he is not subjecting himself to or accepting the jurisdiction of US courts since he renounced citizenship in 2020
Colin Wilhelm / The Block :
Context & Ripple Effects
The 3AC recovery effort has been a chase across borders from the start: liquidators subpoenaed Zhu Su and Kyle Davies via Twitter after the founders resisted cooperation, then moved against them in a British Virgin Islands court to recover $1.3B from the pair personally.
Davies' jurisdictional challenge is his answer to that pressure — and it lands just weeks after his co-founder ran out of room to maneuver: Singapore arrested and jailed Su Zhu for four months over his failure to comply with court orders when he tried to leave the country.
First-order effects
- Davies is forcing the liquidators to fight a threshold battle over whether a US court can reach him at all, before any substantive ruling on the $1.3B they seek from the two founders.
- The move sharpens the asymmetry inside the founder duo: Su Zhu is serving a four-month sentence for non-compliance while Davies argues he sits outside US jurisdiction entirely.
Second-order effects
- With Davies contesting US reach, the liquidators' most viable pressure points shift to the British Virgin Islands action already underway and to any jurisdiction where Davies actually resides — the UAE has been reported as a hideout — making cooperation between those courts decisive.
- The estate's own US position cuts both ways: the same bankruptcy system Davies disavows recently let 3AC raise its FTX claim from $120M to $1.53B, so rejecting US jurisdiction risks undercutting the estate's largest pending recovery.
Third-order effects
- If renouncing citizenship plus physical absence defeats personal jurisdiction, collapsed-fund founders gain a playbook for evading insolvency processes, pushing liquidators toward asset-tracing and mutual-recognition regimes rather than single-court wins.
- Regulators and courts in crypto's main domiciles face pressure to close the gap between where funds operate and where their principals can be compelled to answer — otherwise enforcement defaults to whichever country happens to hold the founder.
The trend: Crypto insolvency recoveries are turning into multi-jurisdictional jurisdictional contests, with founders exploiting citizenship and residence gaps faster than courts can coordinate.