Seriously? Hedge fund brothers 3AC raise $25 million for new crypto exchange

Are you a high risk investor looking to bet on fugitives with a high profile bankruptcy under their belt? Well, a proposed new crypto exchange named GTX might be just the thing for you.

The Block reported Monday that Su Zhu and Kyle Davies, who founded crypto hedge fund Three Arrows Capital (3AC), are circulating a deck of slides to potential investors that outlines a new exchange that would allow creditors to buy and sell claims on bankrupt crypto companies, including 3AC.

Davis and Zhu are the subject of several criminal and regulatory investigations regarding 3AC, which collapsed last June after making a major bet on a fraudulent stablecoin project called Terra. The founders of 3AC, who are said to have been hiding in Dubai and Bali, have been the subject of a New York magazine profile who laughed at their inability to invest and their lavish personal lifestyle.

According to the slide deck, which was also seen speak the wall street journalDavies and Zhu estimate that the market for claims on bankrupt crypto companies, which also include names such as Celsius, Voyager and FTX, is worth at least $20 billion.

Since bankruptcy proceedings typically take years to unfold and final payment is uncertain, many creditors choose to sell their claims to investors who hope to profit from them later.

With that in mind, if Zhu and Davies’ estimate of $20 billion in crypto claims is even roughly accurate, the proposed venture might make sense. But part of that will involve finding investors to back their project and, based on feedback on Twitterconfidence in the pair is not high.

Respected crypto attorney Jake Cherinksy observed that, if you invest in transnational fugitives, “you deserve to lose every dollar you have.”

Meanwhile, the name of the proposed crypto bankruptcy exchange does not inspire confidence. “GTX” appears to be a riff on FTX – the exchange that turned out to be a giant Ponzi scheme.

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