- The founders of the defunct crypto hedge fund 3AC are joining forces with Coinflex exchange founders to pitch to investors on a new crypto exchange focused on claims trading.
- According to the pitch deck, the new exchange plans to launch its products as soon as possible and estimated the claim market to be around $20 billion.
- The Wintermute CEO has given his remarks on the groundbreaking news by warning the crypto community.
Su Zhu and Kyle Davies, 3AC founders, are teaming up with Coinflex exchange founders Mark Lamb and Sudhu Arumugam to raise money for the new crypto exchange GTX.
According to a pitch deck, the partnerships want to raise about $25 million. GTX is designed to enable bankrupt exchange firms, including FTX, Celsius, and others, lay claims on their holdings and use the claims for trading.
The information about the fundraising comes two months after the giant crypto exchange FTX collapsed, leaving several creditors’ pockets in flames. However, the new crypto exchange is taking advantage of the matter by allowing depositors to transfer their FTX claims to GTX and obtain credit in a token called USDG.
The proposed presentation stipulated that “FTX users are selling claims at ~10%face value for immediate liquidity or waiting 10+ years for the bankruptcy to process disbursement.” Notably, it affirmed to crack the claims market;
“Our legal group will streamline and automate claims induction to GTX and make it the dominant marketplace for FTX and other bankrupt companies.”
GTX would allow users to use claims as collateral for trading. The proposed exchange could fill the gap left by the embattled crypto exchange FTX and expand into regulated markets such as the stock markets.
The new exchange is set to launch its new products in February 2023. It estimates that the claims market is worth around $20 billion, which can take up a significant portion of the platform’s assets.
3AC was amongst the significant hedge funds in the crypto space until last year’s downfall of Terra ecosystem and its sister Luna, leaving the firm suffering substantial losses. The court-appointed liquidators, Teneo, have handled the company’s assets as the firm filed for bankruptcy protection in New York.
On January 5, Su and Davies were served subpoenas over Twitter after they refused to accept service from their counsel in Singapore, where the firm is based. Su resurfaced on Twitter in November after a while and used the platform to claim that FTX and other Digital Currency Groups conspired to cause the collapse of the 3AC firm. Su Zhu and Kyle Davies, reportedly in Indonesia and the United Arab Emirates, respectively, fled 3AC’s Singapore offices days after declaring bankruptcy.
Apart from 3AC, the crypto exchange Coinflex halted its withdrawals in June, but later the following month, it resumed partial withdrawals. The exchange sued an individual user in Hong Kong court in July as it sought to fill an $84 million gap in its balance sheet. It is now in its restructuring process.
Crypto User’s Feedback
Various crypto users have responded to the groundbreaking news, including the Winter mute CEO, Evgeny Wishful Cynic Gaevoy, who has warned the crypto community via Twitter, saying,
“We will not participate in venture rounds where these guys are about to enter the cap table, so founders beware.”
He stipulated that the crypto market marker would not work with people investing in the new exchange. As Evgeny has a clear stance on the suspicious project, several crypto investors are staying away from GTX to avoid getting banned from the former’s ventures. The Wintermute plays a vital role in the crypto ecosystem, with a daily trading volume of $5 billion.
The crypto Twitter roast over the new exchange continued, as Nic Carter of Castle Island Ventures noted via Twitter saying,
“Disgraced fraudsters teaming up with other disgraced fraudsters to trade claims from a collapsed fraudulent exchange. Sounds backable.”
Various renowned crypto entrepreneurs question the company’s integrity as they warn crypto users about the new exchange.
