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- The founders of bankrupt crypto hedge fund Three Arrows Capital are pitching a new marketplace called ‘GTX’.
- GTX would be an exchange where people who’ve lost money from crypto collapses can buy and sell bankruptcy claims.
- “If this launches, we deserve every second of this crypto ice age,” crypto trader Scott Melker said.
The founders of failed crypto hedge fund Three Arrows Capital are reportedly trying to launch a new exchange – where people who lost money in the collapse of a digital asset company would be able to buy and sell bankruptcy claims.
Su Zhu and Kyle Davies are seeking to raise $25 million from investors to fund a new platform that they are currently calling ‘GTX’, according to a pitch deck seen by Insider.
The name – which the company’s founders said was a placeholder for now – is an apparent reference to FTX, the bankrupt crypto exchange formerly run by Sam Bankman-Fried that wiped out an estimated $8 billion in customers’ funds when it collapsed in November.
GTX would be a marketplace where creditors to failed crypto companies like FTX could trade bankruptcy claims, the pitch deck said.
Several crypto companies filed for bankruptcy last year as rising interest rates sparked a solvency crisis across the sector – with 3AC being one of the most high-profile cases.
The hedge fund defaulted on a $2.4 billion loan from the crypto lending firm Genesis and a $665 million borrowing from the crypto brokerage Voyager Digital last year – leading to its liquidation by a British Virgin Islands court in July.
Investors who lost money in 3AC’s collapse will be among those who would be able to trade their claims on GTX, according to the Wall Street Journal.
Zhu and Davies are listed in the pitch deck as members of GTX’s four-man founding team alongside Mark Lamb and Sudhu Arumugam, co-founders of the crypto exchange CoinFLEX.
CoinFLEX is another crypto company that suffered during last year’s crypto rout. It suspended all withdrawals in June 2022 after early bitcoin investor Roger Ver racked up an $84 million debt to the exchange.
Scott Melker, a crypto trader and investor who calls himself ‘the Wolf of All Streets’, slammed GTX’s pitch deck as being in poor taste.
“Imagine watching FTX fail after seeing your own company fail and then choosing to try to launch an exchange and name it ‘GTX’ which is a single letter from being ‘FTX’,” he said on Twitter Monday. “Whoever is running this simulation loves trolling us.”
“If this launches, we deserve every second of this crypto ice age,” Melker added.