Coinflex plans give 65% of company to creditors as part of restructuring proposal

Cryptocurrency exchange CoinFlex announced a structuring proposal in response to user feedback following the platform experiencing liquidity issues.

In a Wednesday blog post, CoinFlex said under the proposal – which will be subject to a vote and court approval- creditors will own 65% of the company, while its team members will be allocated 15% of shares as part of an employee share option plan. According to the platform, Series B investors would remain shareholders in the restructured company should the plan be approved.

“As with any reorganization, unfortunately, most shareholders get wiped out,” said CoinFlex CEO Mark Lamb and CRO Sudhu Arumugam. “This situation is no different; with all existing Ordinary and Series A shareholders of the Company losing their equity stakes, including us.”

The platform added that it would be offering creditors its recovery token rvUSD, equity, and USD Coin (USDC) instead of its FLEX Coin. The SmartBCH Alliance would also assume responsibility of the SmartBCH Bridge under the proposal, using its Bitcoin Cash (BCH) to “exchange the sBCH Tokens held by the DeFi SmartBCH users on a 1:1 basis”:

“The SmartBCH Alliance will take over as a creditor of [CoinFlex] for the amount of the BCH that it expends on performing these obligations. The Alliance will be treated like any other creditor with no change in the position of any of the other current creditors.”

CoinFlex plans to hold a community vote on the proposed restructuring on Sept. 25, with 75% of creditors voting yay considered sufficient to pass. The company will then pass the plan along with the vote count 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 just an estimate,” said Lamb and Arumugam.

Related: CoinFLEX announces staff cuts as part of measures to reduce costs by up to 60%

The exchange suspended withdrawals in June, later claiming one “large individual customer” had defaulted on tens of millions of dollars in debt to CoinFlex, causing liquidity issues. Lamb called out BCH proponent Roger Ver for being this individual, while he has denied the exchange’s claims.

All Dutch and English crypto news!

Crypto ATMs to resurge once Bitcoin ‘FOMO’ hits full swing, says CEO

Crypto ATM installs declined in 2023, but a post-halving Bitcoin price growth spurt should see the space rebound, says Brandon Mintz. Interview Own this piece of crypto...

KuCoin’s desperate $10M airdrop, 1 tweet raises $37M for memecoin: Asia Express

Our weekly roundup of news from East Asia curates the industry’s most important developments. KuCoin airdrops $10 million after U.S. SDNY indictment  Cryptocurrency exchange is airdropping $10...

How high can Bitcoin go? New BTC price prediction sees cycle top at $180K

BTC price can more than double in price this cycle, thanks to Bitcoin ETFs, next month's halving, and easing monetary conditions. Markets News Own this piece of...

Abra settles with fifth state as US operations may be winding down

The platform was part of a targeted campaign by state regulators and promised to stop U.S retail operations last summer. News Own this piece of crypto history Collect...

Beste exchanges

Koop je crypto bij Bitvavo