CoinFLEX unveils restructuring proposal

CoinFLEX outlines a restructuring plan allocating equity to creditors, an ESOP for the team, and Series B investors as shareholders.

CoinFLEX, a platform for cryptocurrency derivatives, has unveiled its plan for restructuring the business. The company proposed transferring 65% of equity to creditors, 15% to the team under an ESOP, and to leave Series B investors as shareholders.

We have published the @CoinFLEXdotcom Restructuring Proposal here: https://t.co/tCMjKBXeCq

— Mark Lamb 💪 (@MarkDavidLamb) September 21, 2022

“We believe that the proposal outlined here represents an excellent outcome for all parties, and we are distributing CFV voting tokens among all creditors,” wrote Mark Lamb, the company’s chief executive.

The voting on the proposal will take place on the Snapshot platform. CFV will be credited to users whose assets are locked, and to holders of wrapped Bitcoin Cash (sBCH) on the SmartBCH blockchain. Holders of flexUSD on the Ethereum and SmartBCH networks will also be able to participate in the vote.

To determine the dollar value of the blocked funds, quotes as of 13:00 (Kyiv/Moscow time) on 22 September 2022 are used.

According to the statement, the initiative includes an agreement with BCH Alliance, which will take responsibility for the SmartBCH Bridge and use its own assets to swap sBCH for BCH at a 1:1 ratio.

Earlier CoinFLEX said creditors would receive compensation in the form of Recovery Value USD (rvUSD) tokens, equity and FLEX Coin, but the company abandoned this idea.

The plan envisages distributing rvUSD, equity and USD Coin (USDC). The team explained that the decision stemmed from a desire to direct FLEX Coin reserves to “marketing and other incentives for the development of the business” or leave them on the balance sheet.

In June 2022, CoinFLEX suspended user withdrawals due to “extreme market conditions” and “uncertainty regarding the counterparty”.

Later Lamb said the counterparty is Bitcoin.com founder Roger Ver, who owed CoinFLEX $47 million. Since “Bitcoin Jesus” did not fulfill his obligations, the company sent him a default notice.

The firm turned to the Hong Kong International Arbitration Centre to recover the debt from Ver. The initial damage assessment by the platform’s representatives was deemed inaccurate because it did not account for the founder’s substantial debt to FLEX in tokens.

In July, CoinFLEX said withdrawals had resumed in a limited mode and announced layoffs.

In August the platform filed for restructuring with the Seychelles Islands court.

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