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Amid mounting criticism on social media, crypto investment firm CoinFLEX has attempted to clarify its plans to build a new crypto exchange with Three Arrows Capital (3AC).<\/p>\n
A leaked pitch deck on Jan. 16 revealed it was collaborating with the now-bankrupt hedge fund to build\u00a0a proposed crypto exchange\u00a0called “GTX” \u2014 which would focus on the trading of claims against bankrupt firms.\u00a0<\/p>\n
In a blog post published shortly after, CoinFLEX went on to “clarify misconceptions about the leaked materials concerning the proposed ‘GTX’ Exchange.”<\/p>\n
Firstly, CoinFLEX said it won’t actually be using the “GTX” name as detailed in the pitch deck, noting that it only serves as a placeholder name for now.\u00a0<\/p>\n
Some members of the community had pointed out its similarities to the name of the recently collapsed crypto exchange “FTX” which was previously run by founder Sam Bankman-Fried.\u00a0<\/p>\n
CoinFLEX added it would be looking at rebranding itself into the new entity, noting that CoinFLEX CEO Mark Lamb and co-founder Sudhu Arumugam will remain involved in the new entity.<\/p>\n
Secondly, the firm also attempted to address criticisms about the venture, arguing that building the new exchange would be\u00a0valuable for both holders of claims and for Coinflex creditors.<\/p>\n
CoinFLEX said that any funds raised would be used for operational growth, increasing its equity value for CoinFLEX creditors and shareholders.<\/p>\n
“This avenue will not only be an opportunity to serve a large number of existing crypto creditors but, in doing so, will also bring new volumes to the exchange through crypto trading.”<\/p><\/blockquote>\n
\u201cAbove all, we are committed to ensuring that any decisions and actions taken by CoinFLEX are in the best interest of CoinFLEX creditors,” it added.\u00a0<\/p>\n
The firm was also looking at adding other asset classes to the proposed new entity’s offerings, such as equities and bonds.\u00a0<\/p>\n
“Several avenues are being considered for building out regulated venues\/exchanges for these assets. Over the last few months, we have made significant progress in discussions with regulators and partners in highly regarded jurisdictions,” it stated.<\/p>\n
CoinFLEX also clarified that the ultimate decision on whether to create the new exchange or not will be made by \u201cthe reconstituted board\u201d of the company.\u00a0<\/p>\n
This would include platform depositors, SmartBCH holders or the SmartBCH alliance, Series B holders, and an Independent Director who will be elected by platform depositors with the consent of Series B holders.\u00a0<\/p>\n
It noted that management will abstain from voting on this proposal.\u00a0<\/p>\n
Related: <\/strong>Albright drops lawsuit against Terraform Labs and Do Kwon<\/strong><\/p>\n
Some saw CoinFLEX’s plans to start a new crypto exchange with 3AC as controversial because 3AC was itself a firm that went bankrupt while its founders’ whereabouts are still unknown.<\/p>\n
In a Jan. 16 Twitter post, Ripple’s former director of engineering Ripple Nik Bougalis slammed the newly proposed venture, calling it a \u201cscam\u201d due to the involvement of 3AC founders Su Zhu and Kyle Davies<\/p>\n
\nSo @zhusu<\/a> and Kyle Davies are trying to steal more money! One the one hand, I can\u2019t say I\u2019m surprised: scammers gonna scam.<\/p>\n
But on the other hand, this is so far beyond insane that there\u2019s no word for it. The hubris and arrogance of these pricks truly knows no bounds. https:\/\/t.co\/h2jpiKPmCr<\/p>\n
\u2014 \u200a\u200a\u200a (@nbougalis) January 16, 2023<\/a><\/p><\/blockquote>\n
Meanwhile, the CEO of crypto market maker Wintermute stated that his company will \u201ccancel\u201d anyone who invests in the new exchange.<\/p>\n
\nAnd since we are talking about cancelling stuff, if you are investing into coinflex\/3ac “exchange” you might find it a bit more difficult to work with wintermute in future (on the relationship building side)<\/p>\n
\u2014 wishful cynic (@EvgenyGaevoy) January 16, 2023<\/a><\/p><\/blockquote>\n<\/div>\n