Three Arrows Capital co-founders Kyle Davies and Su Zhu want to start up a new exchange that makes money off of bankrupt cryptocurrency firms.
The co-founders of the failed Three Arrows Capital (3AC) cryptocurrency hedge fund want $25 million to start up a proposed exchange, as reported earlier by The Block and Bloomberg. It will be called “GTX” — according to its leaked pitch deck — “because G comes after F,” and FTX, the once-huge exchange, is now bankrupt.
But like the band Mystik Spiral, they might change the name. After a round of kicking on crypto Twitter, investment firm CoinFlex — which is partnering with the former 3AC founders Kyle Davies and Su Zhu — tried to quiet the controversy by saying GTX “is a placeholder name.” Let’s hope no one has engraved it on their guitar case or anything.
Part of GTX’s pitch is letting people buy and sell bankruptcy claims from failed crypto firms, as well as use those claims as collateral. The group’s looking to raise funds “ASAP” for a potential launch by the end of February, according to the pitch deck.
3AC certainly has experience with failed crypto companies. The hedge fund went belly-up last July after the crash of Luna and its sister coin, TerraUSD, and later defaulted on a $670 million loan provided by the now-bankrupt Voyager Digital. Zhu and Davies went into hiding after reportedly receiving threats in the midst of 3AC’s collapse, leaving behind a $150 million Much Wow yacht and a $30 million Singaporean mansion.
The co-founders estimate that there’s about $20 billion in the crypto claims market, noting that GTX “unlocks” funds from the embattled FTX and Celsius trading firms “for immediate trading.” Zhu tells The Wall Street Journal that 3AC creditors will “have the option to convert their claims into equity in the new claim-trading company.”