Crypto Exchange CoinFLEX plans for restructuring

Crypto Exchange CoinFLEX plans for restructuring

CoinFLEX is one of the crypto exchanges that suffered from the bearish trend and is currently paving the way for restructuring. Following applications for reorganization in the Seychelles court, the exchange released its restriction plan.

The crypto winter in the first half of the year brought severe drought to several crypto assets. As a result, the entire crypto market lost several billion dollars as the value of its assets continued to fall. The crisis worsened with the collapse of the algorithmic stablecoin Terra and its ecosystem.

Then came the collapse of many crypto-related firms over the following months. Some companies used measures to avert the impact and survived the crisis. However, most employees in the affected companies were laid off. Other drastic measures were also implemented to cut operating costs for the companies.

However, some firms could not survive the storm as the intensity of the crisis increased. Therefore, some distressed firms filed for bankruptcy to hold back legal action from users.

CoinFLEX restructuring plan

According to details, CoinFLEX gives its creditors 65% shares in the firm. The team will receive 15%, an employee stock option plan that will vest over time. The goal is to help the team get back to work and grow the company again.

There appears to be no hope for all of CoinFLEX’s existing common and series A shareholders. They will possibly lose their equity share on the stock exchange. However, the company plans to retain the shareholdings of its Series B investors. As a result, they will receive rewards with future equity in the firm.

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After laying out his plan, the new proposal will be voted on by next week. According to the value of CoinFLEX’s CFV token, the restructuring plan will need the approval of approximately 75% of creditors.

If the proposal goes through, CoinFLEX will seek approval for restructuring from the Seychelles courts. This will be by submitting the schedule and other supporting documents to the courts. But when the proposal fails, the stakeholders will move back to their drawing board to adjust the term. There will then be a new round of voting by the creditors for possible approval.

CoinFLEX estimated six weeks for the entire process to move seamlessly. This involves reaching the necessary conditions, getting positive votes from creditors and satisfying the judge.

Fall Of Crypto Exchange CoinFLEX

Due to the crypto winter in the first half of the year, CoinFLEX lost its footing. The exchange later stopped withdrawals from its platform, noting the impact of continued uncertainty with a counterparty.

Crypto Exchange CoinFLEX plans for restructuring
Cryptocurrency Market Trends in Red | Source: Crypto Total Market Cap on TradingView.com

Later, Mark Lamb, the co-founder of CoinFLEX, pointed out that a spokesperson for BCH, Roger Ver, was the counterparty. Lamb alleged that Ver defaulted on a $47 million loan from the exchange.

Ver denied the allegations and fought the exchange on the grounds that CoinFLEX owed him. After that, the exchange’s arbitration with Ver was in a court in Hong Kong, when the amount of debt was reported at 84 million dollars.

Featured Image from Pixabay | Charts by TradingView

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