Founders of failed crypto fund Three Arrows Capital looking to raise $33m for new venture

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 Zhu Su and Kyle Davies – along with the co-founders of crypto exchange Coinflex, 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, which 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,” he said.

“We aim to verify and tokenise their claims and allow claims as collateral,” Mr Zhu said when asked about how the platform would work.

Going by information leaked on Twitter, the name of 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 US high school Philips Academy and Columbia University together, and later worked as traders at Credit Suisse.

At its peak, the two men said 3AC, registered in the British Virgin Islands, had more than US$4 billion assets under management.

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 city’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 over Twitter from the liquidators on how the hedge fund collapsed.

Mr Zhu had previously said he toggles between Indonesia and the United Arab Emirates in a December interview with ST.

Of late, both Mr Zhu and Mr Davies have been active on social media and have publicly blamed Bankman-Fried, 30, of betting against 3AC’s position and dealing the fund the final blow.

United States 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.