CoinFLEX, a beleaguered cryptocurrency exchange, has published a restructuring plan over a month after it filed for the same at Seychelles courts. It was among the many firms that went through restructuring after the crypto crash of earlier in the year.
According to the latest blog post by CoinFLEX, creditors will own 65% of CoinFLEX while existing Series A and ordinary shareholders will lose all their equity stakes. According to the statement, 15% will be given to the CoinFLEX team in the form an employee share option plan that will gradually vest. This is done to assist the team in getting “back on track” and growing the business.
The Series B investors will remain shareholders in the reorganized company and will be incentivized by future equity. Next week’s vote is scheduled. 75% of creditors will need to approve the proposal. This value of CoinFLEX’s CFV token will be used as a proxy.
If the proposal is approved, the exchange will submit the term sheet along with supporting documents to Seychelles Courts for approval. If the proposal fails, the parties will need to amend the terms and return to creditors to request approval in a second round.
If the creditors give the plan approval, satisfy the judge and terms are agreed to, CoinFlex expects that the process will take six weeks.
“We are fully aware that this experience was traumatic for all of our stakeholders and depositors. We are hopeful that we can return to our original path of growth and success through a successful restructuring. Although it won’t be easy nor quick, we have every chance to achieve this goal with the help of our new shareholders, you guys.
In addition, the proposal mentions that the BCH Alliance will take responsibility for the SmartBCH Bridge. It will use its own BCH in exchange for the sBCH tokens held by DeFi SmartBCH users at a 1:1 rate. In the meantime, creditors will be paid the Recovery Value USD, equity and USDC stablecoin.
CoinFLEX announced in June that withdrawals would be stopped from the platform due to “extreme market conditions and continued uncertainty involving a counterparty”. Later, Mark Lamb, the platform’s founder, identified Roger Ver as the counterparty and charged him with defaulting on a $47million loan.
Ver rejected the claims and instead attacked CoinFLEX, saying that the investment platform owed money to him. Ver later increased the amount to $84million, and the exchange entered arbitration with Ver in Hong Kong.
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