key takeaways
- 3AC co-founders Su Zhu and Kyle Davies want to launch their own cryptocurrency exchange.
- They are looking for $25 million from investors.
- GTX, as the project is called, is intended to be a public marketplace for cryptocurrency claims.
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Su Zhu and Kyle Davies want to take advantage of the growing cryptocurrency claims market by launching their own exchange. The crypto community is not impressed.
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Three Arrows Capital is planning something of a comeback.
3AC co-founders Su Zhu and Kyle Davies are searching to raise $25 million to start a new crypto exchange by the name of GTX. They are joined in the company by CoinFLEX co-founders Mark Lamb and Sudhu Arumugam.
According to the pitch desk, GTX will allow trading of crypto claims, which the document describes as a $20 billion market, in matters involving bankrupt FTX, Celsius, BlockFi, Mt. Gox, and other crypto companies. Next, the GTX team plans to expand the product offering to enable trading of cryptocurrencies, stocks, and currencies.
Zhu and Davies’ crypto hedge fund, 3AC, exploded in June 2022 in the wake of the Terra collapse, causing massive contagion within the cryptocurrency industry and forcing several cryptocurrency lenders into bankruptcy. Without apologizing, the two co-founders have refused to cooperate with liquidators and creditors, to the point that the Supreme Court of Singapore and the US Department of Justice. Recently issued subpoenas to them via Twitter.
CoinFLEX, meanwhile, was the crypto exchange that issued Bitcoin evangelist Roger Ver a $47 million loan, and then tried to monetize its bad debt by issuing a token called rvUSD. Later he decided to cut part of his staff to finance the restructuring of the company.
Unsurprisingly, the Pitch Desk GTX was poorly received in the crypto community. “If you are investing in CoinFLEX/3AC[’s] ‘exchange’, you may find it a bit more difficult to work with Wintermute in the future (on the relationship building side),” fixed Wintermute CEO Evgeny Gaevoy. “Similarly, we’re not going to participate in venture rounds where these guys are about to hit the cap table, so founders beware.”
Nic Carter, co-founder of Castle Island voiced a similar feeling. “You can make ‘comeback story’ ‘contrary’ bets with whoever you want, even disgraced con artists, but there are costs associated with that.”
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other crypto assets.
