Founders of bankrupt Three Arrows Capital pitch new platform for crypto debt claims

Founders of bankrupt Three Arrows Capital pitch new platform for crypto debt claims

FTX logo with crypto coins with 100 Dollar bill are displayed for illustration. FTX has filed for bankruptcy in the US, seeking court protection as it looks for a way to return money to users.

Jonathan Raa | Nurphoto | Getty Images

The co-founders of a now-liquidated cryptocurrency hedge fund are courting investors for a new venture that looks to capitalize on other bankruptcies in the space.

Kyle Davies and Su Zhu are listed under the founding members slide of a pitch deck obtained by CNBC for a distressed debt marketplace called GTX. Davies and Zhu founded Three Arrows Capital, a Singapore-based cryptocurrency hedge fund that was ordered to liquidate by a British Virgin Islands court.

The deck noted Three Arrows Capital “went bust in 2022.” It was previously considered one of the most prominent crypto hedge funds that once managed about $10 billion in assets.

Followers of technology and financial exchanges have grown increasingly interested in how bankruptcies and fraud within the crypto space will be handled following the collapse of FTX. Davies and Zhu are part of a group arguing that the so-called crypto “claims” market, in reference to bankruptcies impacting holders of digital currencies, should have a public marketplace.

It aims to appeal to the more than one million FTX depositors that are now involved in a bankruptcy proceeding, a slide in the pitch deck said. Many of those FTX clients are selling claims at about one-tenth of their value for immediate liquidity as they try to avoid what could be a years-long wait for repayment, according to the deck.

They cited a “clear need to unlock” the claims market — one they value at $20 billion and believe GTX could “dominate” within two or three months. GTX said in its pitch that, once scaled, the platform could fill a “power vacuum left by FTX” within crypto trading and move into the securities lending market.

GTX is raising a $25 million seed for the platform, with a goal of coming to the market by the end of February at the latest, according to the deck.

Mark Lamb and Sudhu Arumugam, co-founders of crypto trading platform CoinFLEX, are listed alongside Davies and Zhu as founding members. Representatives from CoinFLEX and Three Arrows Capital did not respond immediately to CNBC’s request for comment.

Beyond the four founding members, the deck lists Kent Deng as GTX’s CTO, Leslie Lamb as CMO and Ewelina Mielecka as chief digital officer. GTX has a team of more than 60 developers, according to the deck.

— CNBC’s MacKenzie Sigalos contributed reporting

Source link

Related post

Bitcoin pro traders warm up the $24K level, suggesting that the current BTC rally has legs

Bitcoin pro traders warm up the $24K level, suggesting…

On Feb. 1 and Feb 2. Bitcoin’s (BTC) price surpassed even the most bullish price projections after the U.S. Federal Reserve…
Troubled Crypto Miners Get Breathing Room as Bitcoin Rebounds

Troubled Crypto Miners Get Breathing Room as Bitcoin Rebounds

(Bloomberg) — Rising Bitcoin prices are buying some time for distressed crypto miners as they renegotiate debt with lenders to stay…
Financial Accounting Standards Board votes to release draft cryptocurrency in March

Financial Accounting Standards Board votes to release draft cryptocurrency…

The Financial Accounting Standards Board, in its Feb. 1 meeting, voted to advance its first standard on cryptocurrencies and digital assets.…

Leave a Reply

Your email address will not be published.