3AC Founders to Start New Exchange GTX: Seeks Fund Raising

3AC Co-Founders, in partnership with CoinFlex, announced the GTX exchange.
GTX is supposed to help reclaim assets stuck in failed crypto exchanges.
They are seeking $25 million and are expected to launch in late February 2023.

It is said that everybody deserves a second chance, provided the same mistakes are not repeated. The co-founders of a failed cryptocurrency hedge fund, 3 Arrows Capital (3AC), are looking to raise $25 million for a proposed crypto exchange called GTX. Per their leaked pitch deck, “because G comes after F,” pun intended with the now bankrupt crypto exchange FTX.

But the name might change in due course after a round of kicking on crypto Twitter investment firm CoinFlex, which is supposed to partner with the founders of 3AC, Kyle Davies and Su Zhu. The partners avoid the controversy by saying GTX “is a placeholder name.” The name FTX does not hold a good reputation.

What will GTX do?

As a part of GTX’s pitch meeting, they want to convey that the proposed exchange will let people buy and sell bankruptcy claims from failed crypto firms along with those claims as collateral. If the pitch deck is to be believed, the group is eyeing to raise funds “ASAP,” with the potential to launch by the end of February 2023.

Does the industry need a GTX?

The co-founders of 3AC have an estimate that says there’s around $20 billion stuck in the crypto claims market. GTX could unlock these funds and help release them from hostile FTX and Celsius trading firms “for immediate trading.” Speaking to the media, Zhu says 3AC creditors will “have the option to convert their claims into equity in the new claim-trading company.”

Moreover, there is a gap in the market, where assets and money stuck in any way on failed exchanges could be retrieved. Theoretically, it could be a very successful venture, but it depends on how they do what they promised.

3AC: Brief History

3 Arrows Capitals have a very interesting history; founded in 2012, it became a fully crypto-focused firm. The co-founder was very active on social media, especially on Twitter posting their trading details and predictions. However, some believed this was a “Psyops technique,” where the reader was manipulated to go the other direction.

3AC heavily invested in Terra LUNA, buying $5596 million worth of 10.9 million LUNA; sadly, today, they value at just $670. Initially, they managed to survive this ecosystem collapse, but two bad trades cost them.

First was heavily investing in GBTC, hoping it to be the next big thing, but as others started their ETFs, the buzz around it vanished. However, they have requested permission to convert them into an ETF but are denied by the SEC. They later had to liquidate their GBTC holdings at a lower rate than expected, thus incurring heavy losses.

The second was tokenized Ethereum or stETH; this was believed to be pegged 1:1 with ETH. Soon this speculation ended, and the prices began to drop dramatically; the holders of stETH began dumping them, further diminishing the price.

Could GTX be FTX 2.0

The exchange prospects are good, but the methodology and technicality can be debated. It’s too early to reach any conclusion, but with lawmakers worldwide bringing stricter regulations and bringing all these exchanges under their belt. There might or might not be a market left for GTX to profit on.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing