Co-founder of a bankrupt crypto business is looking for millions to fund a new 'GTX' exchange

The co-founder of failed crypto hedge fund Three Arrows Capital (3AC) is seeking $25 million to launch a proposed exchange, as previously reported by The Block and Bloomberg. It will be called "GTX" -- according to its leaked pitch deck -- "because G comes after F," and FTX, the once-giant exchange, is now bankrupt.

But like the band Mystic Spiral, they may change names. After a round of kicking on crypto Twitter, investment firm Coinflex — which is partnering with former 3AC founders Kyle Davis and Su Zhu — tried to quell the controversy by calling GTX a "placeholder name." Let's hope no one has that engraved on their guitar case or anything.

Part of GTX's pitch lets people buy and sell bankruptcy claims from failed crypto firms, as well as use those claims as collateral. According to Pitch Deck, the group is looking to raise the money "ASAP" for a possible launch by the end of February.

3AC certainly has experience with failed crypto companies. The hedge fund crashed last July after Luna and its sister coin, TeraUSD, crashed, and subsequently defaulted on a $670 million loan provided by now-bankrupt Voyager Digital. Zhu and Davis reportedly went into hiding after receiving threats amid the 3AC collapse, leaving behind a $150 million Mach Wow yacht and a $30 million Singaporean mansion.

The co-founders estimate the market for crypto claims to be around $20 billion, noting that GTX "unlocks" from embattled FTX and Celsius trading firms "for immediate trading". Zhu told The Wall Street Journal that 3AC creditors "will have the option to convert their claims into equity in the new debt-trading company."