SINGAPORE – The two men behind bankrupt Three Arrows Capital (3AC) are looking for funding to stage a comeback, six months after their cryptocurrency hedge fund collapsed.
3AC’s Mr Zhu Su and Mr Kyle Davies – along with crypto exchange CoinFlex’s co-founders Mark Lamb and Sudhu Arumugam – are aiming to raise US$25 million (S$33 million) in seed funding to launch a platform for crypto bankruptcy claims that they have dubbed GTX.
Mr Zhu told The Straits Times on Monday night that the idea is to allow clients from bankrupt exchange FTX and other insolvent estates to access their capital and start investing again, and “being able to offer them stocks as well”.
“We aim to verify and tokenise their claims and allow claims as collateral,” he said, when asked how the platform would work.
Going by information leaked on Twitter, the name of the new firm references FTX, playing on the fact that the letter “G” comes after “F”.
The new outfit comes six months after 3AC collapsed and two months after the fall of Sam Bankman-Fried’s FTX.
3AC was set up in 2012 by Mr Zhu and Mr Davies, both Singapore citizens and aged 35. The pair had attended United States high school Philips Academy and Columbia University together, and later worked as traders at Credit Suisse.
The two men said 3AC, registered in the British Virgin Islands, had more than US$4 billion in assets under management at its peak.
The prominent crypto fund was hit by the collapse of stablecoin TerraUSD and sister token Luna in May last year, and the bankruptcy proceeding is playing out in Singapore as the country’s High Court has recognised the liquidation order from the British Virgin Islands court.
Reports over a week ago said the two co-founders, whose whereabouts are unclear, have received formal demands via Twitter from liquidators over how the hedge fund collapsed.
Advisers working to liquidate the fund said the two men are not cooperating fully with the unwinding of the fund. They said there were US and Singapore court orders sent via e-mail and Twitter for the two men to comply with targeted and comprehensive discovery demands.
Mr Zhu previously said in a December interview with ST that he shuttles between Indonesia and the United Arab Emirates.
Of late, both Mr Zhu and Mr Davies have been active on social media and have publicly blamed Bankman-Fried, 30, for betting against 3AC’s position and dealing the fund the final blow.
US prosecutors said in December that Bankman-Fried stole billions of dollars from FTX customers to pay debts for his crypto-focused hedge fund Alameda Research, purchase lavish real estate, and donate to US political campaigns.
US federal prosecutors are also investigating whether he manipulated the prices of affiliated tokens TerraUSD and Luna.
Bankman-Fried, who is out on US$250 million bail, has pleaded not guilty.
Days ago, the disgraced co-founder of Temasek-backed FTX said in a blog post that he did not steal money and that Alameda failed to hedge against an “extreme” crash in the crypto markets. “I didn’t steal funds, and I certainly didn’t stash billions away,” he said.
Two of Bankman-Fried’s closest associates have pleaded guilty to defrauding the trading platform’s customers and agreed to cooperate with prosecutors’ investigation.