Founders of Three Arrows Capital pitch platform for crypto chapter claims

The co-founders of a now-liquidated cryptocurrency hedge fund are courting traders for a brand new buying and selling market that goals to capitalize on a rising quantity of bankruptcies associated to digital foreign money.

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

The deck famous Three Arrows Capital “went bust in 2022.” It was beforehand thought-about one of the vital outstanding crypto hedge funds that when managed about $10 billion in property.

Followers of know-how and monetary exchanges have grown more and more eager about how bankruptcies and fraud inside the crypto area shall be dealt with following the collapse of FTX. Davies and Zhu are a part of a gaggle arguing that the so-called crypto “claims” market, in reference to bankruptcies impacting holders of digital currencies, ought to have a public market.

It goals to attraction to the a couple of million FTX depositors that are actually concerned in a chapter continuing, a slide within the pitch deck stated. A lot of these FTX purchasers are promoting claims at about one-tenth of their worth for speedy liquidity as they attempt to keep away from what might be a years-long anticipate reimbursement, based on the deck.

They cited a “clear must unlock” the claims market — one they worth at $20 billion and consider GTX might “dominate” inside two or three months. GTX stated in its pitch that, as soon as scaled, the platform might fill a “energy vacuum left by FTX” inside crypto buying and selling and transfer into the securities lending market.

GTX is elevating a $25 million seed for the platform, with a objective of coming to the market by the tip of February on the newest, based on the deck.

Mark Lamb and Sudhu Arumugam, co-founders of crypto buying and selling platform CoinFLEX, are listed alongside Davies and Zhu as founding members. Representatives from CoinFLEX and Three Arrows Capital didn’t reply instantly to CNBC’s request for remark.

Past the 4 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 workforce of greater than 60 builders, based on the deck.

— CNBC’s MacKenzie Sigalos contributed reporting