Crypto’s New Bankruptcy Racket

Do these failed hedge-fund founders have a deal for you!

WSJ   By Gregg Opelka

Jan. 23, 2023 5:50 pm ET

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Kyle Davies and Su Zhu are back. They’re the co-founders of the collapsed Singapore-based hedge fund Three Arrows Capital, which was ordered to liquidate last June after defaulting on a $2.4 billion loan from Genesis Global Capital—and have they got a deal for you. Mr. Haney, the oleaginous peddler from the 1960s sitcom “Green Acres,” would be proud to have dreamed up such an ingeniously circuitous operation.

Their latest venture was revealed in a presentation leaked on Jan. 16. Messrs. Davies and Zhu are peddling a new exchange for trading stocks, crypto and—wait for it—claims on crypto companies that went bankrupt. Just as theirs did last summer. Joining them are Mark Lamb and Sudhu Arumugam, co-founders of the crypto exchange CoinFLEX. Their stated goal is to raise $25 million for the new exchange, which currently bears the placeholder name GTX, a mocking reference to FTX, Sam Bankman-Fried’s notorious failed exchange. They intend to make it operational as soon as possible.