Founders of Three Arrows Capital, a crypto hedge fund whose bankruptcy in June resulted in potentially billions of losses for investors and creditors, are seeking to raise up to $25 million for their new business. The move, however, is drawing significant backlash from the crypto community.
Three Arrows’s Kyle Davies and Su Zhu are teaming up with founders of crypto futures exchange CoinFlex, which filed for restructuring in Seychelles in August, to start a crypto exchange called GTX that trades crypto claims and others, according to a pitch deck seen by MarketWatch.
The move comes as liquidators of Three Arrows have worked for months to recover assets for its creditors, and accused Zhu and Davies of concealing their whereabouts. Some market participants have pointed out the irony, while others questioned prospects for the new exchange.
Meanwhile, some have been mocking the similarity between the proposed exchange’s name GTX and FTX, which collapsed in November with its founder Sam Bankman-Fried facing criminal charges including fraud.
In response, CoinFlex wrote in a Monday statement that GTX is a placeholder name, and “any new funds raised will be used for operational growth, which we strongly believe will increase value for CoinFLEX creditors.”
Zhu and Davies didn’t immediately respond to requests seeking comment. Representatives at CoinFlex didn’t immediately respond to a request seeking comment.