Su Zhu and Kyle Davies, founders of failed crypto hedge fund Three Arrows Capital (3AC), are reportedly looking to raise capital for GTX, a new cryptocurrency exchange in collaboration with Coinflex Mark Lamb and Sudhu Arumugam. According to field deck, The company is seeking $25 million to start.
The goal of the founders is to create a coalition that will launch a cryptocurrency market specifically for unsuccessful ICO claims.
GTX Exchange: Will the Market Compete?
Well-known crypto journalist Wu Blockchain tweeted a story on Monday, stating that crypto founders are aiming to raise funds for new initiatives. The reporter stated that Su Zhu verified the news by saying:
The founders of 3AC, Zhu Su and Kyle Davis, and the two founders of CoinFlex have launched a new project, GTX, which raised $25m in seed funding to trade claims from creditors. Su Zhu admitted the news to WuBlockchain: “yes, no comment, just busy building”.
— Wu Blockchain (@WuBlockchain) January 16, 2023
The main function of GTX is to allow buying and selling of bankruptcy claims of collapsed cryptocurrency companies and using these claims as collateral. The GTX team believes that the crypto claims market is worth $20 billion, according to a pitch deck that has been making the rounds on Twitter.
GTX customers can trade using claims as protection. He further claimed that this exchange could fill the gap created by FTX and access other regulated sectors like the stock market. Due to its similarity to FTX, the crypto community mocked the name of the platform, GTX.
Imagine watching FTX fail after watching your company fail and then choosing to try to launch an exchange and the name “GTX” is the single letter of “FTX.”
Whoever runs this simulation likes trolling us.
— Wolves All the Way (@scottmelker) January 16, 2023
According to The Wall Street Journal, Zhu said the platform’s vision and goals may change. He explained that the company’s temporary name was a joke about the collapse of FTX.
However, GTX also expects to attract creditors from other failed exchanges, such as Celsius and BlockFi, and individuals who lost money when Mt Gox, the largest cryptocurrency exchange at the time, collapsed in 2014.
3AC Crew Past Pictures, Is It Stable?
After the collapse of Terra in June 2022, Zhu and Davies’ 3AC crypto hedge fund collapsed, causing panic and prompting several crypto lenders to declare bankruptcy.
In addition, the two co-founders have been issued subpoenas by the Supreme Court of Singapore and the US Department of Justice via Twitter for failing to cooperate with creditors.
@zhusu and @KyleLDavies jpg a copy of the order made by the Supreme Court of Singapore against Mr. Zhu, Mr. Davies and Three Arrows Capital Pte. Ltd is attached to this tweet by way of service. A copy of the unturned order is provided by email and can be provided upon request. pic.twitter.com/NVFd3pUhi3
— 3ACLiquidation (@3ACLiq) January 5, 2023
3AC has a margin call on a long position as the price of Bitcoin dropped from $28,000 on June 12 to $21,000 on June 14. So in order to make a difference in the margin, he began to tap the funds of other investors, including 8 Blocks’ $ 1 million.
according to Danny Yuan, some outstanding stakes 3AC are liquidated, which causes the market price to decrease even more. In essence, Three Arrows lost money and their clients’ money.
Some of 3AC’s creditors claim that the company has lost $400 million in liquidation. However, the company has about $30 million in debt due to default on a loan due on June 27, 2023.
On 27 June 2022, Sky News reported that 3AC has been liquidated by the court in the British Virgin Islands (BVI). The court ruled that the company was insolvent and ordered the sale of its assets to repay its debts.
Featured Image From Coincu, Chart from Tradingview.com.