Founder of the Three Arrows Capital Pitch platform for crypto bankruptcy claims

For demonstration purposes, the FTX logo is presented with $100 bill crypto currencies. FTX has declared bankruptcy in the United States and is seeking legal protection in order to repay cash to customers.

Getty Images | Nurphoto | Jonathan Raa

The co-founders of a now-liquidated cryptocurrency hedge fund are looking for investors for a new trading platform that will capitalize on a growing number of digital currency-related bankruptcies.

Kyle Davies and Su Zhu are named as founder members on a presentation deck obtained by CNBC for GTX, a distressed debt marketplace. Davies and Zhu established Three Arrows Capital, a Singapore-based bitcoin hedge fund that was ordered liquidated by a British Virgin Islands court.

Three Arrows Capital “went bankrupt in 2022,” according to the deck. It used to be one of the most well-known crypto hedge funds, with assets worth over $10 billion.

Following the demise of FTX, supporters of tech and financial exchanges are more interested in how bankruptcies and fraud are handled in the crypto arena. Davies and Zhu are among those advocating for a public marketplace for bankruptcy impacting digital currency holders in the so-called crypto “claims” market.

According to a slide in the pitch deck, it intends to appeal to the more than one million FTX depositors who are now entangled in bankruptcy procedures. According to the deck, many of these FTX clients are selling receivables for a tenth of their worth in order to avoid possibly years of waiting for reimbursement.

They highlighted a “obvious need to get into the claims industry,” which they estimate is worth $20 billion and believes GTX can “dominate” in two or three months. In its proposal, GTX stated that if expanded, the platform could fill a “power vacuum created by FTX” in cryptocurrency trading and join the securities lending sector.

GTX is seeking $25 million for the platform, with an aim of launching by the end of February at the latest, according to the deck.

Along with Davies and Zhu, Mark Lamb and Sudhu Arumugam, co-founders of cryptocurrency trading platform CoinFLEX, are mentioned as founding members. CoinFLEX and Three Arrows Capital representatives did not immediately reply to CNBC’s request for comment.

In addition to the four founding members, the deck names GTX CTO Kent Deng, CMO Leslie Lamb, and Chief Digital Officer Ewelina Mielecka. GTX has a team of more than 60 developers, according to Deck.

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