Beleaguered cryptocurrency exchange CoinFLEX has released a restructuring plan more than a month after filing for the same at a Seychelles court. It was one of the several firms to have gone into restructuring following the crypto crash earlier this year.
Per the latest blog post, creditors of CoinFLEX will own 65% of the company, while all the existing ordinary and Series A shareholders will lose their equity stakes. The CoinFLEX team will be allocated 15% in the form of an employee share option plan which will vest over time, the statement read. The motive is to help the team get “back on track” and grow the business.
On the other hand, the Series B investors will continue to be shareholders in the reorganized business and will be incentivized with future equity. A vote on the new proposal is slated for next week and will need the approval of 75% of creditors by the value of CoinFLEX’s CFV token.
If the proposal passes, the exchange will present the term sheet and supporting documents to the Seychelles Courts to approve the reorganization. If it doesn’t, the stakeholders will have to modify the terms and then return to all creditors for a second round of voting to seek approval.
In case the reorganization plan receives a green light from the creditors, satisfies the judge, and the terms are reached, CoinFlex estimates the process to take up to six weeks.
“We fully recognize that this has been a traumatic experience for all our depositors and stakeholders. We hope that with a successful reorganization, we will return to the path of growing and becoming a successful exchange. It will not be overnight, nor easy, but with the support of our new army of shareholders – you guys – we have every chance of achieving that goal.”
The proposal also mentions the BCH Alliance will assume the responsibility of the SmartBCH Bridge and use its own BCH to exchange the sBCH Tokens held by the DeFi SmartBCH users on a 1:1 basis. Meanwhile, the creditors will receive the Recovery Value USD (rvUSD), equity, and USDC stablecoin.
In June end, CoinFLEX announced halting withdrawals from its platform as a result of “extreme market conditions” and “continued uncertainty involving a counterparty.” The platform’s 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 dismissed the allegations and instead lashed out at CoinFLEX, claiming that the investment platform owed him money. The amount was later revised to $84 million, with the exchange entering arbitration with Ver in a Hong Kong court.
The post Crypto Exchange CoinFlex Proposes Restructuring Plan appeared first on CryptoPotato.
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