Cryptocurrency exchange CoinFlex has announced a structuring proposal in response to user feedback following the platform’s liquidity issues.
In a Wednesday post on his blog, CoinFlex said that under the proposal, which will be subject to a vote and court approval, creditors will own 65% of the company, while members of its team will be allocated 15% of the shares as part of a employee stock options. According to the platform, the series B investors will remain shareholders of the restructured company in case the plan is approved.
“As with any reorganization, unfortunately most of the shareholders are eliminated,” CoinFlex CEO Mark Lamb and CRO Sudhu Arumugam said. “This situation is no different, with all of the company’s current common and series A shareholders losing their holdings, including us.”
The platform added that it would offer creditors its recovery token rvUSD, capital, and USD Coin (USDC) instead of its FLEX Coin.. The SmartBCH Alliance would also take over responsibility for the SmartBCH Bridge under the proposal, using its Bitcoin Cash (BCH) to “exchange sBCH Tokens held by DeFi SmartBCH users on a 1:1 basis”:
“The SmartBCH Alliance will take over as creditor of [CoinFlex] for the amount of BCH that you spend in compliance with these obligations. The Alliance will be treated like any other creditor without changing the position of any of the other current creditors.”
CoinFlex is scheduled to hold a community vote on the restructuring proposal on September 25, in which 75% of creditors will vote in favor, which is considered sufficient to pass it.. The company will then submit the plan, along with the vote tally, to the Seychelles courts for final approval.
“If everything is in order, we expect this process to take up to 6 weeks, however this is only an estimate,” said Lamb and Arumugam.
A successful conclusion of this vote and acceptance by the Seychelles courts will mark the end of our restructuring period and the beginning of the next phase in our journey. We aim to emerge as a community owned business, with a new exciting focus. More details to eat.
— Mark Lamb (@MarkDavidLamb) September 21, 2022
The successful conclusion of this vote and acceptance by the Seychelles courts will mark the end of our restructuring period and the beginning of the next phase of our journey. Our goal is to emerge as a community-owned company, with an exciting new approach. More details soon.
The exchange suspended withdrawals in June, subsequently claiming that a “large individual client” had defaulted on tens of millions of dollars of debt to CoinFlex, causing liquidity problems.. Lamb singled out BCH advocate Roger Ver as this individual, while he has denied the exchange’s claims.
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