CoinFLEX Attempts to Hose Down Backlash Over Proposed New 3AC Project

The exchange’s pitch deck was leaked to the media, and it was attacked for involving bankrupt crypto hedge fund Three Arrows Capital.

CoinFLEX, a crypto investment firm, has attempted to clarify its plans to construct a new crypto exchange with Three Arrows Capital in the face of rising social media criticism (3AC).

On Jan. 16, a leaked pitch deck revealed that it was cooperating with the now-bankrupt hedge fund to develop a planned crypto exchange named “GTX,” which would focus on trading claims against bankrupt corporations.

CoinFLEX went on to “clarify misconceptions about the leaked information about the proposed ‘GTX’ Exchange” in a blog post published shortly after.

To begin, CoinFLEX stated that the “GTX” name, as mentioned in the pitch deck, will merely function as a placeholder for the time being.

Some members of the community compared it to the name of the recently defunct cryptocurrency exchange “FTX,” which was previously owned by creator Sam Bankman-Fried.

CoinFLEX also stated that it will consider rebranding into the new organisation, and that CoinFLEX CEO Mark Lamb and co-founder Sudhu Arumugam will remain involved in the new entity.

Second, the company attempted to answer complaints about the business by saying that constructing the new exchange will benefit both claim holders and CoinFLEX creditors.

CoinFLEX stated that any cash raised would be used for operational growth, boosting the value of the company’s equity for creditors and shareholders.

“Not only will this channel provide an opportunity to serve a large number of existing crypto debtors, but it will also add new volumes to the exchange through crypto trading.”

“Above all, we are committed to ensuring that all CoinFLEX decisions and actions are in the best interests of CoinFLEX creditors,” it added.

The firm was also considering adding other asset classes, such as shares and bonds, to the proposed new entity’s offerings.

“Several options are being investigated for developing regulated venues/exchanges for these assets. “We have made great progress in negotiations with authorities and partners in highly regarded jurisdictions over the last few months,” it said.

CoinFLEX also stated that the company’s “reconstituted board” will make the choice on whether or not to launch the new exchange.

Platform depositors, SmartBCH holders or the SmartBCH alliance, Series B holders, and an Independent Director who will be elected by platform depositors with the permission of Series B holders will be included.

It was stated that management will not vote on this proposition.

Some viewed CoinFLEX’s ambitions to launch a new cryptocurrency exchange with 3AC as contentious because 3AC was a bankrupt company whose founders’ whereabouts remain unknown.

Nik Bougalis, Ripple’s former director of engineering, attacked the newest proposed company in a Jan. 16 tweet, labelling it a “scam” due to the presence of 3AC founders Su Zhu and Kyle Davies.

Meanwhile, the CEO of crypto market maker Wintermute claimed that his organisation will “cancel” anyone who invests in the new exchange.