Three Arrows Founders Launch New Crypto Startup

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Illustration: Natalie Peeples/Axios

The founders of bankrupt hedge fund Three Arrows Capital are seeking $25 million in seed funding for a startup that will capitalize on the growing rash of crypto bankruptcies, according to the bloc.

Why it matters: Kyle Davies and Su Zhu are building a company with two other co-founders from the ashes of an industry explosion they helped fuel, writes Lucinda.

Details: In a pitch deck presented to investors this month, Davies and Zhu say the startup plans to connect holders of crypto bankrupt claims with potential buyers and sellers.

Cheekily dubbed GTX, a reference to FTX, the company aims to eventually become a crypto and stock trading marketplace.

Worth noting: Davies and Zhu are joined by CoinFLEX co-founders Mark Lamb and Sudhu Arumugam in building GTX. CoinFLEX filed for restructuring in a Seychelles court last year.

What they’re saying: The “current process of buying and selling receivables on competing platforms is clumsy, expensive, and impossible for small receivables holders to access,” the pitch deck states.

Background: Three Arrows, which Davies and Zhu co-founded, was a crypto hedge fund that officially went into liquidation in June, a collapse that sparked a wider contagion that quickly engulfed the industry.

Three Arrows’ bankruptcy process has been messy, with liquidators saying Davies and Zhu were evasive and hampered the company’s ability to return funds.

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