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Want to Buy Distressed Crypto Assets? 3AC Founders May Be Creating an Exchange For That Called GTX

Want to Buy Distressed Crypto Assets? 3AC Founders May Be Creating an Exchange For That Called GTX

su zhu amongst creditors files 5m claim against website 1
Image Source: Bloomberg

The founders of now-bankrupt crypto hedge fund Three Arrows Capital and troubled crypto exchange CoinFlex have teamed up to create a new exchange focused on the claims of failed crypto projects.

Su Zhu and Kyle Davies, the founders of collapsed crypto hedge fund Three Arrows Capital (3AC), in collaboration with Mark Lamb and Sudhu Arumugam, who founded CoinFlex, plan to launch GTX, a new crypto exchange focused on claims trading.

Prominent crypto journalist Wu Blockchain first revealed the news in a Monday tweet, saying that the crypto executives are looking to raise $25 million for their new project. Su Zhu allegedly confirmed the news to the journalist, stating, “yes, no comment, just busy building it.”

According to the pitch decks circulating on Twitter, the team behind GTX claims that the crypto claims market is worth $20 billion. They want to provide liquidity to claimants by allowing them to “sell them to crypto while using claims as margin capital.”

The move comes just two months after FTX, once the third-largest crypto exchange in the world, collapsed, leaving more than a million creditors out of pocket. The new exchange ostensibly wants to take advantage of such failures by offering depositors the ability to transfer their FTX claims to GTX and receive immediate credit in a token called USDG.

GTX, the exchange’s name, has also created some controversy as some noted that it is an “FTX” spin off. However, CoinFLEX has said they could rebrand CoinFLEX into this new entity and will not use GTX. “We will not use GTX; it currently serves as a placeholder name,” the exchange said in a blog post. 

Notably, the bad reputation of the crypto bosses behind the initiative has already cost them some potential partners. For one, Evgeny Gaevoy, CEO of the Wintermute crypto market-maker, has made it clear that they are not going to work with the disgraced crypto executives. 

In a Monday tweet, Gaevoy warned that “if you are investing into CoinFLEX/3AC’ exchange,’ you might find it a bit more difficult to work with Wintermute in future (on the relationship-building side).” Gaevoy added, “we are not going to be participating in venture rounds where these guys are about to enter the cap table, so founders beware.”

For context, 3AC’s Davis and Zhu are under multiple criminal and regulatory investigations pertaining to 3AC. The duo have also made efforts to stay under the radar since their company’s bankruptcy, and are currently believed to be hiding out in Dubai and Bali.

Likewise, CoinFLEX has been grappling with problems. As reported, the exchange filed for restructuring in a Seychelles court in August last year. CoinFlex’s filing came as the platform failed to resolve a shortfall due to a counterparty failing to make a margin call.

 

Muhabarishaji

🧪 |Medical Laboratory Scientist 🥇 | Mindset over Everything. 
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