The crypto industry continues to grapple with the fallout from Three Arrows Capital's (3AC) collapse. In a shocking turn of events, LayerZero CEO Bryan Pellegrino has accused 3AC co-founder Kyle Davies of attempting a desperate maneuver shortly before the hedge fund's demise.

Pellegrino alleges that Davies approached LayerZero with a proposition – to transfer their entire treasury to 3AC in exchange for "better rates than other borrowers." This revelation comes after Davies' controversial appearance on a podcast, where he refused to apologize to investors.

Pellegrino suggests Davies' actions reek of deception. He claims 3AC, despite being on the brink of collapse, actively sought loans from various firms with no intention of repayment. This alleged misconduct extends beyond LayerZero, with Pellegrino pointing towards Davies' treatment of associates like BitMex co-founder Arthur Hayes.

The accusations have resonated with many in the crypto community. Many believe Davies' loan requests were fueled by false pretenses. Others criticized his lack of remorse on the podcast.

From Billion-Dollar Fund to Crumbling Empire

Founded in 2012, 3AC was once a titan in the crypto sphere, managing an estimated $10 billion in assets. However, a series of unfortunate events, including the TerraUSD crash in 2022, led to a dramatic decline in their fortunes. By April 2022, their assets had dwindled to a mere $3 billion.

The plummeting value culminated in a Chapter 15 bankruptcy filing on July 1, 2022. This move aimed to shield assets from creditors, but the damage was already done. The domino effect of 3AC's collapse impacted numerous investors and companies.

From Genesis Global Trading's $2.3 billion loss to Blockchain.com's $270 million hit and Voyager Digital's bankruptcy filing – the ripples continue to be felt.

Pellegrino's accusations cast a dark shadow over Davies' conduct and raise questions about transparency within the crypto industry. As the dust settles, one thing is certain: the fallout from 3AC's collapse will continue to be a cautionary tale for years to come.