Kyle Davies, co-founder of Three Arrows Capital, said that FTX and Alameda are collaborating against clients and “hunting” for his own company.
Speaking to CNBC, Davies made important claims regarding FTX and Alameda.
Accusation from the Founder of Three Arrows Capital
Davies used the following statements in his statement:
“We were hunted as their biggest client and our positions were liquidated. FTX’s latest employees are bragging about hunting us down and liquidating our positions.”
CNBC reached out to FTX founder Sam Bankman Fried regarding the issue. SBF responded to the statement:
“He was shocked. I absolutely refuse. There is no truth to the allegations here.”
Davies’ allegations came after months of silence from the company, which filed for bankruptcy in July. FTX filed for bankruptcy on November 11 after it was revealed that it had lent billions of dollars to its sister company, Alameda.
“Stop Hunting” is a trading strategy that attempts to force market participants to exit a position by driving the price of an asset to such a level that a trader has to execute a stop loss order. While the strategy is often used by commercial companies such as Alameda, providing insider information about a listed position creates unfair competition.
Davies argued that although FTX and Alameda are different companies, it became clear that they shared information and were “in the same room.”
“This is not how it is done in companies that are not crypto companies. There is a clear distinction between the stock exchange and any registered commercial company.”
Davies alleges that FTX employees shared details of Three Arrows Capital’s positions with traders at Alemada and then used that information to trade against them and force a stop order.
Davies said that in time the truth will emerge:
“We will find the truth and we look forward to justice being served”
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