Crypto Exchange CoinFlex Proposes Restructuring Plan
Beleaguered cryptocurrency exchange CoinFLEX has revealed a restructuring plan more than a month after filing for the same in the Seychelles court. It was one of several companies that restructured after the crypto crash earlier this year.
per latest Blog post, CoinFLEX’s creditors will own 65% of the company, while all existing common and Series A shareholders will lose their equity shares. The CoinFLEX team will be allocated 15% in the form of an employee share option plan that will vest over time, the statement said. The objective is to help the team get “back on track” and grow the business.
On the other hand, Series B investors will continue to be shareholders in the restructured business and will be incentivized with future equity. A vote on the new proposal is scheduled for next week and will require the approval of 75% of creditors by the value of CoinFLEX’s CFV token.
If the proposal is passed, the exchange will submit the term sheet and supporting documents to the Seychelles court for approval of the restructuring. If not, the stakeholders will have to amend the terms and then go back to all the creditors for a second round of voting for approval.
If the restructuring plan gets the green light from creditors, satisfies the judge and conditions are met, CoinFlex estimates the process could take up to six weeks.
“We fully recognize that this is a traumatic experience for all our depositors and stakeholders. We hope that through a successful restructuring, we will return to the path of growing and becoming a successful exchange. It won’t happen overnight, nor will it be easy, but with the support of our new army of shareholders – you guys – we have every chance of achieving that goal.”
The proposal also states that the BCH Alliance will take over the SmartBCH bridge and use its own BCH to exchange sBCH tokens held by DeFi SmartBCH users on a 1:1 basis. Meanwhile, lenders will receive Recovery Value USD (rvUSD), equity and USDC stablecoins.
In late June, CoinFLEX announced the withdrawal from its platform as a result of “extreme market conditions” and “continued uncertainty involving counterparties”. Platform co-founder Mark Lamb later identified that BCH proponent, Roger Ver, was the counterparty and accused him of defaulting on a $47 million loan.
However, Ver denied the allegations and instead hit out at Coinflex, claiming the investment platform owed him money. The amount was later revised to $84 million with Vere entering into an exchange arbitration in a Hong Kong court.
Binance Free $100 (Exclusive): Use this link to register and get $100 free and 10% off fees in the first month on Binance Futures (Conditions).
PrimeXBT Special Offer: Use this link to register and enter code POTATO50 to get up to $7,000 on your deposit.