CoinFLEX to launch $47 million token sale to resume customer withdrawals

The cryptocurrency derivatives platform CoinFLEX will launch the Recovery Value USD (rvUSD) token. With it, the company aims to settle the debt of a certain affluent private client and resume user withdrawals.

Hi everyone, we’re sharing our latest update on plans for re-enabling withdrawals on the platform 👇https://t.co/34brwoDYuL

— CoinFLEX (@CoinFLEXdotcom) June 27, 2022

“rvUSD — a token issued by Liquidity Technologies Ltd. (‘CoinFLEX’). It is linked to an outstanding debt of a certain affluent individual to CoinFLEX,” says the company’s published technical document.

On June 24 the platform suspended withdrawals due to “extreme market conditions” and “uncertainty regarding the counterparty.” At that time, the head of the company Mark Lamb stressed that the latter is not a hedge fund Three Arrows Capital (3AC) or “any lending firm”.

On June 27, Lamb said the company had run into trouble due to a “longstanding” client to whom it had issued a loan on unusual terms. There is no liquidation price on his position — in return he provides liquidity to the platform. However, amid the crisis his position has become unprofitable.

“We want to emphasise that this person is a highly intelligent individual with substantial means, experiencing temporary liquidity problems due to the credit (and price) crisis in crypto and traditional markets. This person holds significant stakes in several private ‘unicorns’ and a large portfolio of securities,” Lamb wrote.

Through the issue of rvUSD the platform intends to cover the client’s debt obligations and resume withdrawals. The company will issue 47 million tokens at a price of 1 USDC.

Experienced investors may participate in the token sale, except US residents. Applicants must have an annual income of at least $200 000 and a net worth of $1 million.

The minimum subscription size will be 100 000 USDC. 

To attract participants to the token sale, the platform set an annual yield on the instrument at 20%. CoinFLEX’s treasury also allocated 2.5 million FLEX (~$2.67 million at the rate at the time of writing) — after repaying the whale’s debt, the coins will be distributed among rvUSD holders.

The company plans to resume withdrawals on June 30.

Voyager Digital, the crypto broker, sent a default notice to hedge fund 3AC over a missed loan payment.

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