The FTX logo with crypto currencies with a $100 bill is shown for illustration. FTX has filed for bankruptcy in the US and is seeking court protection as it looks for a way to pay users back.

Jonathan Raa | Nurfoto | fake images

The co-founders of a now-liquidated cryptocurrency hedge fund are courting investors for a new trading market that aims to capitalize on a growing volume of digital currency-related bankruptcies.

Kyle Davies and Su Zhu are listed on the founding member slide of a pitch deck obtained by CNBC for a distressed debt market called GTX. Davies and Zhu founded Three Arrows Capital, a Singapore-based cryptocurrency hedge fund that was ordered liquidated by a court in the British Virgin Islands.

The mallet noted that Three Arrows Capital “went out of business in 2022.” It was previously considered one of the most prominent crypto hedge funds that once managed around $10 billion in assets.

Followers of the technology and financial exchanges have become increasingly interested in how bankruptcies and fraud within the crypto space will be handled following the FTX collapse. Davies and Zhu are part of a group arguing that the so-called crypto “claims” market, referring to bankruptcies that affect holders of digital currencies, should have a public market.

Its goal is to appeal to the more than one million FTX depositors now embroiled in bankruptcy proceedings, a slide on the launch pad said. Many of those FTX clients are selling claims at about a tenth of their value for immediate liquidity while trying to avoid what could be a years-long wait for redemption, according to the deck.

They cited a “clear need to unlock” the claims market, one they value at $20 billion, and believe GTX could “dominate” within two to three months. GTX said in its presentation that, once scaled, the platform could fill a “power vacuum left by FTX” within cryptocurrency trading and move into the stock lending market.

GTX is raising a $25 million seed for the platform, aiming to hit the market by the end of February at the latest, according to the deck.

Mark Lamb and Sudhu Arumugam, co-founders of the CoinFLEX cryptocurrency trading platform, are listed alongside Davies and Zhu as founding members. Representatives for CoinFLEX and Three Arrows Capital did not immediately respond to CNBC’s request for comment.

Beyond the four founding members, the deck includes Kent Deng as GTX CTO, Leslie Lamb as CMO, and Ewelina Mielecka as Chief Digital Officer. GTX has a team of more than 60 developers, according to the deck.

— CNBC’s MacKenzie Sigalos contributed to this report