After reports that CoinFLEX would participate in an endeavor to launch a crypto bankruptcy claims exchange came out earlier on Monday, numerous member of the firm’s community expressed their disagreement with the move both on Telegram and Twitter. After addressing some of the remarks on the Telegram channel, CoinFLEX published an official update on the GTX project.

Community Reacts to “GTX”

Earlier on Monday, it was reported that the founders of the bankrupt hedge fund Three Arrows Capital—Su Zhu and Kyle Davies—were looking to launch a crypto bankruptcy claims exchange in collaboration with CoinFLEX. The exchange, reportedly called GTX, is seeking to secure $25 million in funding for the launch.

Many, both on Twitter and on CoinFLEX’s official Telegram Channel, expressed their disagreement with the idea. The proposed exchange faced ridicule due to its name—GTX—and backlash due to its association with Zhu and Davies. One user in the channel expressed his disagreement with the decision saying that 3AC founders “bring nothing to the table except a very bad rep”.

Additionally, some have gone so far as to denounce the connection with 3AC’s founders calling them scammers. Zhu and Davies have withdrawn from the crypto community in the wake of Three Arrows’ bankruptcy and have started making a comeback only recently. The hedge fund went bankrupt after the collapse of LUNA in May 2022 causing damage to other digital asset firms such as Genesis which is now facing restructuring and potential bankruptcy.

CoinFLEX Reveals its Plans for “GTX”

In its update, CoinFLEX, which itself filed for restructuring in Seychelles in 2022, expressed its belief that the creation of the claims exchange could provide additional value to creditors. Furthermore, it made an effort to dispel some rumors stating that Mark Lamb and Sudhu Arumugam would remain at their posts and that the firm’s management might see some expansion in the near future.

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. Any new funds raised will be used for operational growth, which we strongly believe will increase value for CoinFLEX creditors. 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. Above all, we are committed to ensuring that any decisions and actions taken by CoinFLEX are in the best interest of CoinFLEX creditors.

CoinFLEX also explained that “any funds raised will be used to grow the company and its equity value for shareholders”, and added that additional benefits are being discussed. While saying that CoinFLEX might rebrand itself as this proposed exchange, it reiterated Zhu’s earlier statement that GTX is not its final name. Allegedly, GTX is an inside joke taking a jab at the recently collapsed FTX and only serves as a placeholder name.

This article originally appeared on The Tokenist

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