Coinflex said that a proposed exchange for trading claims won't use GTX for its name after a proposal to raise $25 million for the project had been widely mocked on Crypto Twitter.
"Building a marketplace for trading claims (in addition to crypto and potentially other assets) is an evolution of Coinflex's commitment to building open and transparent financial markets," the company said in a blog post. "New funds raised will be used for operational growth, which we strongly believe will increase value for Coinflex creditors."
The Block reported earlier in the day that Su Zhu and Kyle Davies, the founders of collapsed crypto hedge fund Three Arrows Capital, were looking to raise the money with Coinflex founders Mark Lamb and Sudhu Arumugam for a new exchange that would give depositors the ability to transfer claims related to the also collapsed FTX crypto exchange for an immediate credit in a token to be called USDG.
A pitch deck obtained by The Block had dubbed the new exchange GTX, "because G comes after F." Coinflex, which is in the process of restructuring, said that was just a placeholder.
Nic Carter, a founding partner at Castle Island Ventures, compared the latest venture to "arsonists returning to the scene of the crime, hawking buckets of water to their victims," while Wintermute founder and CEO Evgeny Gaevoy warned anyone that invests in the exchange might find it difficult to work with his firm in the future – "on the relationship building side." He added that Wintermute won't participate in venture rounds where they appear on the cap table.
The two Coinflex executives will remain with the company, though "key members" may be added as funds are raised, the company said, adding that it could be rebranded into the new entity.
"CoinFLEX creditors/Series B will be the largest class of shareholders, and we are also discussing other benefits," the company said, noting that it was also considering adding other asset classes such as equities and bonds. "Above all, we are committed to ensuring that any decisions and actions taken by Coinflex are in the best interest of Coinflex creditors."
The company said it will provide a further update once a possible round or partnership materializes.
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