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The founders of a bankrupt crypto hedge-fund firm, Three Arrows Capital Ltd, are reportedly looking for capital infusion to launch an exchange where creditors to insolvent digital-assets firms, including their own, could buy and sell claims.
Su Zhu, a co-founder of the hedge fund, is seeking to raise $25 million for the new platform, as seen in a pitch created for the investors, seen by The Wall Street Journal.
The company is referred to as GTX. Zhu said that GTX isn’t the final name of the company. The other founders are likely to finalize a name for the company next week.
Also read: Once Reluctant, Scaramucci Alleges FTX’s Sam Bankman-Fried ‘Committed Fraud’
In its investor’s deck, GTX estimated a $20 billion market for crypto claims based on the notional value of those claims. GTX looks to compete with its rival bankruptcy-claims trading startup Xclaim Inc by offering lower fees.
Three Arrows defaulted last year on a roughly $2.4 billion loan from crypto lender Genesis Global Capital. The lender’s parent company, Digital Currency Group Inc, filed a claim of about $1.2 billion against Three Arrows.
Last summer, a British Virgin Islands court ordered the liquidation after the crypto hedge fund was sued for failing to repay debts.
Zhu said some Three Arrows creditors would have the option to convert their claims into equity in the new claim-trading company.
Most recently, crypto exchange Crypto.com announced to cut its global workforce by 20% as it navigates ongoing economic headwinds and “unforeseeable” industry events.
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Image and article originally from www.benzinga.com. Read the original article here.