The founders of now-defunct crypto hedge fund Three Arrows Capital and troubled crypto exchange Coinflex have teamed up to form a new exchange focused on claims from failed crypto projects.
Su Zhu and Kyle Davis, 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 platform focused on claims trading. Crypto Exchange.
Prominent crypto journalist Wu Blockchain first revealed the news in a tweet on Monday, stating that the crypto executives are looking to raise $25 million for their new project. Su Zhu reportedly confirmed the news to the reporter, saying, “Yeah, no comment, just busy making it.”
According to a pitch deck circulating on Twitter, the team behind GTX claims the crypto market is worth $20 billion. They want to provide liquidity to claimants by allowing them to “sell crypto to them using the 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 apparently seeks to take advantage of such failures by offering depositors the ability to transfer their FTX claims to GTX and receive instant credits in a token called USDG.
The exchange’s name GTX has also caused some controversy as some have said it is an “FTX” spin-off. However, Coinflex has stated that they may rebrand Coinflex to this new entity and will not be using GTX. “We will not be using GTX; it currently serves as a placeholder name,” Exchange Told in a blog post.
Notably, the bad reputation of the crypto owners behind the initiative has already cost them some potential partners. For one, Evgeny Gavoy, CEO of Wintermute crypto market-maker, has made it clear that he is not going to work with discredited crypto executives.
on a monday Tweet, Gavoy cautioned that “if you’ve been investing in the ‘Coinflex/3AC’ exchange, you may find it a little more difficult (on the relationship-building side) to work with Wintermute in the future.” “We’re not going to participate in venture rounds where these people are going to enter the cap table, so founders beware,” Gavoy said.
For reference, 3AC’s Davis and Zhu are Under multiple criminal and regulatory investigations Related to 3AC. The two 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.
Similarly, Coinflex is also facing problems. Exchange, as mentioned filed for reorganization In August last year in a court in Seychelles. Coinflex’s filing comes after the platform failed to resolve a shortfall due to a counterparty failing to make a margin call.
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