CoinFLEX, a cryptocurrency investment firm, has made an effort to make clear its plans to establish a new cryptocurrency exchange with Three Arrows Capital (3AC) in the face of growing social media criticism.

CoinFLEX attempts to quell social media criticisms

It was disclosed in a leaked presentation deck on January 16 that CoinFLEX was working with the now-defunct hedge fund to develop a planned cryptocurrency exchange named “GTX” which would concentrate on the trading of claims against bankrupt companies.

CoinFLEX followed up with a blog post to clear up any misunderstandings about the leaked information regarding the prospective “GTX Exchange.”

According to CoinFLEX, first off, the name “GTX” mentioned in the pitch deck will not actually be used; rather, it is functioning merely as a stand-in for the time being.

The resemblance of “GTX” to the name of the recently defunct cryptocurrency exchange “FTX,” which was once controlled by the founder Sam Bankman-Fried, was noted by a few community members who tweeted:

“Su Zhu and Kyle Davies, founders of the defunct Three Arrows Capital, are trying to raise $25M to start a new crypto exchange called GTX. The name is a take on “FTX” because G comes after F.”

CoinFLEX is considering a move to rebrand

CoinFLEX stated that it will be considering renaming itself under the new name, adding that the CEO of CoinFLEX, Mark Lamb, and its co-founder, Sudhu Arumugam, will continue to be active in the new organizations.

Second, the company made an effort to respond to concerns raised about the project by asserting that creating the new exchange will be advantageous to both claimants and CoinFLEX creditors.

Any monies raised, according to CoinFLEX, will go toward operational expansion, boosting the company’s equity value for shareholders and creditors. This route will serve a significant number of existing cryptocurrency creditors through and also result in the addition of fresh volumes to the exchange through cryptocurrency trading.

“Above all, we are committed to ensuring that any decisions and actions taken by CoinFLEX are in the best interest of CoinFLEX creditors,” they said.

“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.”

In addition, the company was considering including additional asset classes, including shares and bonds, in the offerings of the proposed new organization.

CoinFLEX plans to reconstitute its board

CoinFLEX mentioned that management would not vote on the decision of whether or not to launch the new exchange. Rather, it indicated that “the reconstituted board” of the firm, which will consist of platform depositors, SmartBCH owners or the SmartBCH alliance, and the Series B holders, as well as an independent director who will be chosen by the platform depositors with the approval of the Series B holders, will make the decision whether or not to launch the new exchange.

The fact that 3AC itself was a company that went bankrupt and the locations of its founders are still unknown has made some people view CoinFLEX’s plans to launch a new cryptocurrency exchange with 3AC as contentious.

So @zhusu and Kyle Davies are trying to steal more money! One the one hand, I can’t say I’m surprised: scammers gonna scam.

But on the other hand, this is so far beyond insane that there’s no word for it. The hubris and arrogance of these pricks truly knows no bounds. https://t.co/h2jpiKPmCr

— 𝙽 𝙸 𝙺 𝙱 (@nbougalis) January 16, 2023

The former director of engineering at Ripple, Nik Bougalis, blasted the newly planned venture in a tweet on January 16 and called it a “scam” because 3AC founders Su Zhu and Kyle Davies were involved. Also, Evgeny Gaevoy, the CEO of crypto market marker called Wintermute, has since announced in a tweet that his company will “cancel” any investments made in the new exchange.

And 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)

— wishful cynic (@EvgenyGaevoy) January 16, 2023