Three Arrows Capital Founders Resurface, Launch Trading Platform For Crypto Claims

Zhu Su and Kyle Davies, the embattled founders of the now-bankrupt crypto hedge fund Three Arrows Capital (3AC), have partnered with the founder of the crypto exchange CoinFlex to launch Open Exchange (OPNX), a new cryptocurrency trading platform which they label as the "world's first public market place for crypto claims trading and derivatives."

Former 3AC CEO Zhu announced the launch of the new crypto trading platform on Twitter last week and said that the team has opened its waitlist for interested users who want to put their claims for sale.

In a thread that the crypto Twitter found audacious, Zhu disclosed that the fallout of Three Arrows Capital was a dark period, which they did not handle well and then proceeded to use the crypto hedge fund's controversial collapse to introduce his new project, noting that it "takes all the pain/lessons" to "build something" and "advance crypto."

Open Exchange, based on its official website, will allow users to use their claims against bankrupt crypto firms like Celsius, Voyager, FTX and Three Arrows Capital, among many others, to trade or use them as margin collateral.

"Open Exchange is a solution and home for those harmed by crypto crises. Allowing claimants to immediately unlock the value of their claims, either trading them into crypto or using them as margin collateral," the trading platform's website stated, noting that it can offer "a streamlined claims onboarding process and a public marketplace for claims trading, unlocking billions of dollars of trapped capital and giving users a chance to rebuild."

Rumors about 3AC founders building a new type of exchange surfaced last month, especially when crypto journalist Colin Wu divulged that Zhu and Davis already raised around $25 million for the project, which at the time was using the placeholder GTX.

But many in the crypto community are not pleased with the trading platform's launch, not because of the type of business it is offering but because of the people behind the project.

"Mr. Davies has been active on social media, having 'tweeted' or 'retweeted' dozens of times on Twitter. Shamelessly, while ducking his obligations to his failed company, Mr. Davies has been recently active in an effort to raise tens of millions to start a new crypto exchange called 'GTX,'" 3AC liquidators said in a court filing dated Feb. 7.

3AC liquidators received the court's approval to subpoena the crypto hedge fund founders in December and issued them in January over the social media platform Twitter.

According to liquidators, they have exhausted other means to issue subpoenas to Zhu and Davies. Despite this, both failed to comply or respond to any.

The subpoenas are related to the ongoing bankruptcy of Three Arrows Capital, which shook the cryptocurrency industry last year.

The crypto hedge fund filed for bankruptcy in July 2022, a few months after the Terra network imploded and wiped out billions of investors' funds.