Less than a year after Three Arrows Capital (3AC) imploded along with $2.5 billion of clients' money, the hedge fund's founders, Su Zhu and Kyle Davies, are back with a new cryptocurrency exchange where people can trade bankruptcy claims – a hot area given all the distress in the industry.

The Open Exchange (OPNX) was announced last month, garnering wry smiles and smirks. The crypto community hadn't always been so skeptical of the duo. Until the $60 billion Terra ecosystem collapsed last April, they were hailed as messiahs among their peers, touted for running the hottest hedge fund and often endorsed by trading firms and market makers.

That ended bitterly when the market tumbled last year. The company's long-only trading strategy rapidly unwound in a pool of bad debt and unsecured loans before ending in a period of contagion that hit a series of leading crypto businesses. (That includes Genesis, which has the same parent company – Digital Currency Group – as CoinDesk.)

(By Oliver Knight)