Cointime

GTX — 3AC Founders Plan to Profit From the Victims of FTX

Wasif M Rahman· 2 min read

Disgraced Three Arrows Capital founders Su Zhu and Kyle Davies are pitching investors on a new distressed debt marketplace called GTX.

Three Arrows Capital also known as 3AC was once the darling hedge fund of the crypto space and had more than 10 billion in assets under management. However behind the scenes, the founders effectively gambled their assets on risky trades and the cascade of liquidations triggered by the collapse of Terra Luna left the hedge fund insolvent and unable to repay investors. 3AC was then ordered to liquidate by a court in the British Virgin Islands and the founders fled their HQ in Singapore likely to escape criminal charges.

The name of their new venture is only one letter off from FTX and that is not a coincidence as GTX aims to provide a public marketplace for the crypto claims market consisting of the myriad of bankruptcies the crypto space has seen over the last year.

Building a distressed debt marketplace is ironic as Three Arrows Capital was directly responsible for a number of those bankruptcies as the hedge fund operated more akin to a degen staking firm and its founders are still undergoing bankruptcy proceedings themselves.

There are many investors impacted by the collapse of 3AC alongside FTX, BlockFi, Celsius and Voyager. A distressed debt marketplace can certainly offer value and opportunities for speculators and the wider crypto ecosystem. That said, I don’t think the people responsible for causing the market turmoil should be the ones to profit off those impacted.

Su Zhu and Kyle Davies are raising a $25 million seed round for GTX and are hoping to bring the platform to market by February.

I have been in crypto long enough to know that this space is home to some very unsavory individuals and they somehow always get a second chance…Do Kwon and Terra Luna Classic come to mind. Speculative greed tends to forgive the sins of the past.

Time will tell if GTX is successful in this initial funding round. I doubt this is the last we will hear of Su Zhu and Kyle Davies whose physical whereabouts still remain unknown.

# 3AC # FTX

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