CoinFLEX Defends Controversial ‘GTX’ Venture with 3AC Founders

What comes after ‘F’? Founders of bankrupt Three Arrows Capital have a new project they want money for, to enable trading of FTX claims

article-image

Three Arrows Capital Founders Su Zhu and Kyle Davies | Blockworks exclusive art by Axel Rangel modified by Blockworks

share

CoinFLEX is justifying its new potential venture “GTX” with Three Arrows Capital (3AC), saying the plans represent an evolution of its own goals.

A pitch deck leaked on Jan. 16 showed CoinFLEX plans to team up with 3AC co-founders Kyle Davies and Su Zhu to create a new crypto exchange. 

They expect it to be a place where creditors of insolvent firms like FTX would be able to trade their claims. Users will have the ability to transfer their claims to GTX and immediately receive a credit via a new token called USDG.

In the pitch deck, GTX estimates a $20 billion market for its product, based on the notional value of crypto claims. The team is looking to raise $25 million for the exchange, and is eyeing a launch before the end of February.

It intends to “fill the power vacuum” left by FTX, to become the go-to marketplace for crypto claims within two to three months of its launch.

The name GTX, a play on fallen crypto exchange FTX, is currently a placeholder and will be changed eventually. It was chosen because “G comes after F,” one slide shows.

CoinFLEX CEO Mark Lamb will remain as CEO and co-founder Sudhu Arumugam will stay on the management team. The team also includes other CoinFLEX executives Kent Deng, Leslie Lamb (who is married to Mark Lamb) and Ewelina Mielecka.

CoinFLEX said it will provide further details once it has managed to secure fundraising or an established partnership. 

GTX attracts controversy

The planned venture has triggered some criticism from the crypto community. Reddit users pointed out flaws in the idea, with one Redditor saying, “basically the idea is to let people trade on the platform by promising funds from another platform that is in bankruptcy proceedings?”

Wintermute CEO Evgeny Gaevoy hinted on Twitter that he didn’t want his firm, one of the largest crypto makers, to be associated with anyone invested in the CoinGlex/3AC venture.

Loading Tweet..

Meanwhile, Ripple’s former director of engineering Nik Bougalis said Zhu and Davies are “trying to steal more money.” 

“Anyone that gives these irredeemable scammers a single red cent to help fund this new exchange, will only be exposing themselves as a consciously bad actor,” Bougalis added.

Matthew Liu, co-founder of Origin Protocol, however, commended the concept, adding that he favored “people getting back on the horse after they’ve taken a fall.”

Both firms had a rough 2022

3AC blew up last year after defaulting on a $2.4 billion loan from crypto lender Genesis. Its bankruptcy triggered a downward spiral for several crypto participants, since it had a long list of counterparties. Zhu and Davies have allegedly not been cooperating on asset disclosures with liquidators, and they have not been open about their whereabouts. But liquidators believe they may either be in Bali or Dubai.

CoinFlex itself filed for restructuring in Seychelles last year after a single client failed to meet a margin call. It also raised eyebrows after announcing it would try to raise missing funds by issuing a new token with a 20% yield.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Unlocked Advisory-min.png

Research

This report distills Blockworks Advisory’s research on incentive programs and their analysis, offering a foundation for designing future initiatives and advancing industry-wide standards. By highlighting key lessons and methodologies, we aim to empower protocols to make informed, data-driven decisions.

article-image

The company did about 2.5 times the amount of crypto-backed collateral financing in November compared to the rest of 2024, exec says

article-image

Programmable yield, seamless swaps and decentralized control are the hallmarks of a new stablecoin model

article-image

Crypto is “really exciting,” former SEC Commissioner Paul Atkins said in a podcast interview last year

article-image

Bitcoin is now the “seventh most valuable asset in the world by market cap, just behind the likes of Google and Amazon,” GSR’s Brian Rudick said

article-image

Many analysts expected bitcoin to top $100K before year-end, though it’s been on a post-election tear

article-image

Will investors take a 10% lower return to get access to a regulated investment wrapper?