Kyle Davies said that he and his co-founders would donate proceeds from the new exchange business to creditors of the failed crypto hedge fund Three Arrows Capital (3AC).

Kyle Davies and Su Zhu, the founders of bankrupt hedge fund 3AC who recently launched the crypto bankruptcy claims exchange OPNX, claim to have found a way to contribute to creditor recoveries through their new venture.

In a Twitter Spaces event on Monday, Davies said “karma” was driving him to give back to creditors, and the plan to do so was centered around proceeds from OPNX. 

“We’ve set up the first ever shadow recovery process. This SRP is a way for Su and I to donate to creditors which are early and supporting. If there are some that don’t want to deal with us, then they don’t have to,” explained Davies.

He stressed that this recovery process was entirely separate from the ongoing liquidation of 3AC, which is being overseen by Teneo. A spokesperson for the firm told CoinDesk that Davies and Zhu had wilfully ignored multiple requests to assist with the process, and the two had actually hindered creditor recoveries. 

“Instead of promising creditors future earnings from a nascent venture, we would recommend that the founders engage in the court-ordered activities already underway,” said the Teneo spokesperson.

Davies, however, believes that the new process will be a way for creditors that lost money in the fallout of 3AC to make more back. 

“If we do bad and they do well, then that’s great. And that’s good karma, or whatever you want to call it,” he said.

The decision to launch OPNX just months after 3AC filed for bankruptcy protection raised eyebrows, with court filings pointing to a $3.5 billion liability owed to 27 crypto firms. The largest creditor listed is Digital Currency Group subsidiary Genesis Asia Pacific Pte Ltd, which loaned $2.3 billion to the hedge fund.