Key Takeaways
- • Open Exchange, a new crypto venture co-founded by Su Zhu and Kyle Davies of collapsed hedge fund Three Arrows Capital, lets customers trade bankruptcy claims on failed crypto companies, including Celsius, FTX and Three Arrows itself.
- • The platform went live in April 2023 and has encountered numerous problems since launch, according to the Wall Street Journal.
- • The venture illustrates the reputational challenge facing former Three Arrows principals as they attempt to rebuild in the crypto market after the fund's 2022 failure.
Summary
The founders of Open Exchange, Su Zhu and Kyle Davies, previously ran Three Arrows Capital, the crypto hedge fund that collapsed in 2022. According to the Wall Street Journal, the pair are now attempting to build a new crypto venture that would allow customers to trade bankruptcy claims on failed crypto firms, a market that includes claims tied to Celsius, FTX and Three Arrows itself.
The platform went live in April 2023, but the WSJ reports that it has been hit with numerous problems since launching. The source article is limited in detail, and the full scope of those operational issues is not described in the material available for this summary.
The story underscores the difficulty that principals of failed crypto managers face in regaining institutional credibility. For allocators evaluating exposure to distressed crypto claims, the episode highlights both the demand for secondary markets in bankruptcy claims and the execution and reputational risks associated with sponsors who have prior blowups on their record.
The platform went live in April 2023, but the WSJ reports that it has been hit with numerous problems since launching. The source article is limited in detail, and the full scope of those operational issues is not described in the material available for this summary.
The story underscores the difficulty that principals of failed crypto managers face in regaining institutional credibility. For allocators evaluating exposure to distressed crypto claims, the episode highlights both the demand for secondary markets in bankruptcy claims and the execution and reputational risks associated with sponsors who have prior blowups on their record.
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