After facing liquidity problems, cryptocurrency exchange CoinFlex announced a restructuring proposal on September 21, in response to customer feedback.
In a blog post published on September 21, CoinFlex said that the proposal—which must be approved by a vote of creditors and subsequently the court—would result in creditors owning 65% of the business while team members would receive 15% of the company’s shares under an employee stock option plan.
The platform stated that if the plan is accepted, Series B investors will continue to hold shares of the reorganised company.
Chief revenue officer Sudhu Arumugam and CoinFlex CEO Mark Lamb said, “As with every reorganisation, regrettably, the majority of shareholders get wiped out.” “This circumstance is no different; all current ordinary and Series A shareholders of the Company, including us, lost equity shares.”
The website also indicated that it would give creditors its recovery token rvUSD, USD Coin and equity in exchange for its FLEX Coin (USDC).
The SmartBCH Alliance would also be in charge of the SmartBCH Bridge under the proposal and utilise its Bitcoin Cash (BCH) to “swap the sBCH Tokens owned by the DeFi SmartBCH users on a 1:1 ratio.”
“The SmartBCH Alliance will now act as creditor of CoinFlex for the quantity of BCH it uses to fulfil these commitments. The Alliance will be handled in the same manner as any other creditor and none of the other present creditors’ positions will alter.”
On September 25, CoinFlex intends to hold a community vote on the planned restructuring, with a majority of 75% of creditors voting in favour being required to pass. The business will next submit the proposal and the voting results to the Seychelles Courts for ultimate approval.
Arumugam and Lamb stated, “We estimate that this operation could take up to six weeks if everything goes as planned, but this is just a guess.”
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