Zhu and Davies Seeking to Profit From the World They Ruined
Reading Time: 3 minutes Su Zhu and Kyle Davies are trying to raise $25 million for GTX, a platform that will profit from claims issued to customers of defunct crypto platforms The collapse of their former venture, Three Arrows Capital, led to these very platforms collapsing The gall and brazenness of the attempt is staggering, even for crypto Would you give money to someone to raise a company whose profits will come, in part, from the collapse of a sector that they themselves helped to bring down? That’s what’s being asked of potential investors of GTX, the stunningly un self-aware project from Su Zhu The post Zhu and Davies Seeking to Profit From the World They Ruined appeared first on FullyCrypto.
- Su Zhu and Kyle Davies are trying to raise $25 million for GTX, a platform that will profit from claims issued to customers of defunct crypto platforms
- The collapse of their former venture, Three Arrows Capital, led to these very platforms collapsing
- The gall and brazenness of the attempt is staggering, even for crypto
Would you give money to someone to raise a company whose profits will come, in part, from the collapse of a sector that they themselves helped to bring down? That’s what’s being asked of potential investors of GTX, the stunningly un self-aware project from Su Zhu and Kyle Davies of Three Arrows Capital (3AC) fame and the founders of Coinflex. The foursome want to profit from the people who have suffered at the hands of the crypto contagion, which 3AC helped perpetuate, and they are seeking $25 million to do it. No, seriously.
Crypto Incompetence Inception
When the news broke yesterday that Su Zhu and Kyle Davies, the two clowns who created and drove the Herbie of the crypto hedge fund world, were creating a new crypto project, the crypto world rolled its eyes. When it was revealed that it was being run in conjunction with the founders of Coinflex, the outfit that let Roger Ver take it for $84 million based on his reputation, the crypto world stared wide eyed at its collective screens.
When they read that it was based on claims issued to customers of collapsed crypto firms, that it was to be called GTX, and that, finally, it was looking for $25 million in investment, the crypto world fled to the corner of the room and sat gibbering for several hours.
Claims Bought at a Discount
Heres’ the pitch. Claimants of bankrupt crypto companies such as FTX and Celsius can transfer their claims to the new platform and swap it for a proprietary token, USDG. However, the cost of this instant money is that they have to sell at a lower valuation than their claim is worth. This gives them instant credit rather than having to risk their claim not paying out, or waiting for years to get it, and gives GTX a premium.
This, the founders say, is just the start – it wants to be “the only public marketplace for claims trading on orderbooks”. From there, the company wants to expand into the trading of crypto and then stocks, filling the “power vacuum left by FTX”.
The brazenness of the venture itself is staggering. 3AC collapsed in June last year having lost a $3 billion portfolio that it had just weeks before. This collapse had a huge impact on the companies that were involved in its lending circle, including Blockchain.com, Voyager Digital, Genesis, BlockFi, and FTX. It is staggering, then, that GTX (“because G comes after F” – no, seriously, it says that) plans to now capitalize on the chaos it has wrought by taking the customers of the platforms it helped crush by taking the cream off the top of their claims.
$25 Million for “ASAP” Launch
And then there’s the fundraise. GTX is seeking $25 million in order to launch “ASAP” (one can only assume they have been building it all this time and are ready for launch), with the profiles of the founders oddly not including the fact that Davies and Zhu mismanaged 3AC into a brick wall, and Coinflex allowed Roger Ver to rack up an $84 million debt, which has resulted in the platform having to restructure and engaging in a legal battle with him to get its money back.
These are hardly the kind of people you want to be handing your money over to. And yet, inevitably, someone will. This is crypto, and as the saying goes, some idiot out there will be greedy and foolish enough to part with a few million dollars for a quick win in this new crypto claims market. And, when this collapses too, there will be another company issuing claims to its customers. And the whole cycle starts again.
Zhu and Davies have seemingly followed the U.S. government’s approach to business – blow something to bits and then make money rebuilding it. If you want to hand your money over to people like this then go ahead, but don’t say you haven’t been warned.
Over and over again.
The post Zhu and Davies Seeking to Profit From the World They Ruined appeared first on FullyCrypto.
