Su Zhu, founder of Three Arrows Capital, is making a comeback! To launch a new platform to buy and sell FTX debt

The founders of two bankrupt cryptocurrency companies are teaming up to create an exchange that will allow users to trade claims on bankrupt cryptocurrency companies.

Three Arrows Capital, which filed for bankruptcy in July last year, and its founders Su Zhu and Kyle Davies are working with the two founders of the cryptocurrency exchange CoinFLEX to create an exchange called “GTX” where users can trade Cryptocurrencies, stocks and claims on bankrupt companies like FTX.

According to a fundraising brief obtained by CoinDesk, the project is trying to raise $25 million in seed funding. The founders believe that GTX is built on a “clear market need” and is expected to unlock a $20 billion cryptocurrency debt market. Expected to “dominate” within 2 to 3 months.

GTX plans to charge users a fee of 0.25% to 0.50%, and it will be launched as soon as the end of February. The brief states that once debt trading attracts enough users, GTX will begin allowing its users to trade cryptocurrencies and stocks, thereby “filling the market gap left by FTX’s collapse.”

In this regard, Su Zhu has confirmed to the media that the news is true, but did not disclose more details.

CoinFLEX, which is currently undergoing reorganization, issued a document explaining that the new trading platform established in cooperation with Three Arrows Capital will not be named GTX, and GTX is just a placeholder name. CoinFLEX also stated: “Any new funds raised will be used for operational growth, which we firmly believe will add value to CoinFLEX creditors.”

In response to the above news, the cryptocurrency community quickly expressed their doubts. For example, Evgeny Gaevoy, CEO of cryptocurrency market maker Wintermute, clearly stated that he would not invest in this new exchange established by the founder of Three Arrows Capital. He said:

If you are investing in CoinFLEX, an exchange of Three Arrows Capital, you may find it a bit difficult to work with Wintermute in the future. We also will not participate in these ventures that are going to enter the capital cap table.

In addition, the cynicism of this new project has also caused repercussions in the cryptocurrency community. Nic Carter, a partner at blockchain venture capital fund Castle Island Ventures, said:

Disgraced fraudsters team up with other disreputable fraudsters to trade claims on a defunct fraudulent exchange. That actually sounds reasonable.

Three Arrows Capital (Three Arrows Capital, 3AC) used to be one of the large cryptocurrency hedge funds. It is famous for its high-leverage tactics in the currency circle. It has borrowed large sums of money from BlockFi, Celsius, Babel Finance and Voyager Digital and other cryptocurrency companies. However, they were unable to repay due to market turmoil, which caused these platforms to suspend the withdrawal of assets one after another. In July last year, they filed for bankruptcy protection in the New York court due to insolvency.