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Bankrupt Hedge Fund 3AC's Return as a VC Stirring Up Crypto Community
3AC co-founder Kyle Davies told CoinDesk that the new entity aims to provide support for projects that are building for a decentralized future, but skeptics have recalled the original firm’s tainted past.
Three Arrows Capital (3AC)is stirring up the crypto community again, this time with a surprise comeback using the same name, only in the guise of a venture capital (VC) firm.
On Wednesday OPNX, the bankruptcy claims exchange co-founded by CoinFLEX executives and two people behind the defunct hedge fund Three Arrows Capital (3AC), announced that they have a new partner: 3AC Ventures. The partners will “invest in projects building in the OPNX ecosystem and working toward a decentralized future,” OPNX tweeted.
STORY CONTINUES BELOW
3AC Ventures even has a website that says the new firm "is focused on superior risk-adjusted returns without leverage.” The hedge fund 3AC collapsed last year after suffering heavy losses during the implosion of Terra’s LUNA stablecoin.
OPNX, the new exchange where users can trade debt claims on bankrupt companies like FTX and Voyager, went live in April and counts 3AC veterans Kyle Davies and Su Zhu among its founders. Even during the fundraising round, the exchange – then named GTX – faced scrutiny by the crypto community. Large players like Wintermute distanced itself from GTX immediately.
The exchange also stumbled during its rollout that initially saw low volume. Volume on the exchange has since risen, although a large portion of the crypto community has remained skeptical of the exchange and its backers.
So when it announced the partnership with freshly minted 3AC Ventures, the crypto community weighed in again doubtfully. Twitter influencer LilMoonLambo summed up the vibe, tweeting, “holy shit this is a real tweet.”
Even Arthur Hayes, the former CEO of crypto exchange BitMEX, got involved in the Twitter discourse. He retweeted Davies’ 3AC Ventures announcement, asking, “Why did 3AC die, please enlighten us?”
Su Zhu previously obtained a restraining order against Hayes from a Singapore court.
However, the skeptics haven’t deterred Davies from promoting the new VC firm’s goal.
"3AC Ventures aims to provide support for projects that are building for a decentralized future. We are keen to collaborate with those brave enough to tackle the most significant challenges and create cutting-edge products,” Davies told CoinDesk.
The token for the OPNX exchange, OX, rose over 12% in the last 24 hours, while the overall crypto market also rallied as bitcoin traded above $30,000 on Wednesday.
Oliver Knight contributed to the reporting of this story
Brandy Betz
Brandy covered crypto-related venture capital deals for CoinDesk. She previously served as the Technology News Editor at Seeking Alpha and covered healthcare stocks for The Motley Fool. She doesn't currently own any substantial amount of crypto.
Oliver Knight
Oliver Knight is the co-leader of CoinDesk data tokens and data team. Before joining CoinDesk in 2022 Oliver spent three years as the chief reporter at Coin Rivet. He first started investing in bitcoin in 2013 and spent a period of his career working at a market making firm in the UK. He does not currently have any crypto holdings.
