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Other people’s money is the best kind

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You may recall the story of Three Arrows Capital, which convinced a lot of rubes to part with their money based on the incredibly sophisticated theory that crypto would just keep increasing in value for perpetuity. Perhaps the founders have gotten their comeuppance? Haha no:

Not long after his cryptocurrency hedge fund collapsed last year, spawning a market meltdown that devastated the industry, Kyle Davies got on a plane and left his troubles behind.

He flew to Bali. As his company was liquidated and law enforcement authorities opened investigations on two continents, Mr. Davies spent his days painting in cafes and reading Hemingway on the beach.

He also went sightseeing. He traveled in Thailand, where the fried oysters cost only a few dollars, and admired the local architecture in Malaysia. He posted a photo from a private zoo in Dubai, showing him stroking a tiger chained to a pole. In Bahrain, he attended a Formula 1 event in the run-up to the Grand Prix.

One clear evening, on a rooftop in Bali, Mr. Davies took shrooms with a group of crypto colleagues. “You look at the stars, and the stars are just, like, moving,” he recalled over dinner last month at a seafood restaurant in Barcelona, Spain, where he was vacationing with his wife and two young daughters. “You touch the grass, and it feels, like, not like normal grass.”

Life as a crypto industry pariah, it turned out, wasn’t so bad.

A year ago, Three Arrows Capital, the hedge fund founded by Mr. Davies and Su Zhu, both now 36, imploded almost overnight. Worshiped by their hundreds of thousands of Twitter followers, Mr. Davies and Mr. Zhu had been crypto superstars, known for their trading acumen and bold predictions about the market. They were fixtures on the crypto podcast circuit whose influence allowed them to borrow hundreds of millions of dollars from leading firms and make big bets on the future of the industry.

When their hedge fund failed, a large swath of the industry was dragged down with it. The ensuing crisis drained the savings of millions of amateur investors and plunged other companies into bankruptcy.

Do they feel a little bad about ordinary people who were convinced to invest in their Ponzi scheme by their podcast network? You probably know the answer:

Neither was willing to apologize for the collapse. Three Arrows owes its creditors $3.3 billion; the firm was registered in the British Virgin Islands, and its court-appointed liquidators there claim that Mr. Davies and Mr. Zhu have refused to cooperate in the recovery process. In October, Bloomberg reported that federal regulators in the United States were investigating whether Mr. Davies and Mr. Zhu had misrepresented their finances to Three Arrows investors.

Mr. Davies and Mr. Zhu maintain that they did nothing wrong. They said they had faced death threats, but pointed out that no government agency had sued them or sought their arrests.

A friend recently asked Mr. Davies whether he felt any remorse. “Remorse for what?” he said he had replied.

The corporate veil can be the best kind of veil!

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