Founders of bankrupt Three Arrows Capital launch GTX, a new platform for crypto debt claims; seeking to raise $25M seed round

The founders of the bankrupt crypto hedge fund Three Arrows Capital (3AC) are making a second go at crypto after the troubled startup was ordered into liquidation in June by a court in the British Virgin Islands.

According to an exclusive by CNBC, the two co-founders, Kyle Davies and Su Zhu, are now courting investors for their new venture that looks to take advantage of a growing list of bankruptcies in the crypto space with the launch of a distressed debt marketplace called GTX.

The two are listed as the founding members of GTX, according to a pitch deck obtained by CNBC. Other GTX founding members include Mark Lamb and Sudhu Arumugam, co-founders of the crypto trading platform CoinFLEX. GTX is seeking to raise a $25 million seed for the platform, with the goal of coming to the market by the end of February at the latest, CNBC reported, citing the pitch deck.

In an ironic way, the new distressed debt marketplace looks to appeal to the more than one million FTX depositors that are now involved in a bankruptcy proceeding, CNBC said, citing a slide in the pitch deck. GTX founding members also cited a “clear need to unlock” the claims market, which they value at $20 billion and believe GTX could “dominate” within two or three months.

Beyond the four founding members, the pitch deck lists Kent Deng as GTX’s CTO, Leslie Lamb as CMO, and Ewelina Mielecka as a chief digital officer. The pitch deck also shows that GTX has a team of more than 60 developers, CNBC wrote.

Once valued at $10 billion, the Singapore-based cryptocurrency hedge fund filed for bankruptcy in July. Three Arrows’ margin call rippled through the entire crypto market last year. One of the affected crypto companies is crypto lender BlockFi, which recently announced that it has liquidated its position in Three Arrows.

Founded in 2012 by Su Zhu and Kyle Davies, Three Arrows Capital is a hedge fund manager that provides risk-adjusted returns. The firm is headquartered in Singapore. Three Arrows is now planning to sell its asset including holdings in crypto startups.