Embattled Crypto Futures Exchange Files For Restructuring Amid Ongoing Legal Battle
Crypto futures exchange CoinFLEX is reportedly seeking court approval for a restructuring plan as it faces financial difficulties following a significant default by one of its customers.
Citing an email sent to CoinFLEX creditors on August 9, Fortune reports that the embattled firm filed an application with the Seychelles High Court for the reorganization and restructuring of the company.
CoinFLEX is issuing the notice pursuant to a court order and as prescribed by the IBC Act, the Seychelles law governing International Business Companies (IBCs).
“Notice is hereby given to the creditors of the above company that the company has filed an application under section 208 of the IBC Act for the reorganization or reconstruction of the company under the supervision of the High Court of Seychelles under section 208 of the IBC Act.”
CoinFLEX stopped customer withdrawals in June due to increased volatility in the crypto market. The troubled company says it is experiencing financial distress in part because a customer was unable to settle a large debt.
The exchange has already initiated legal action in the Hong Kong International Arbitration Center (HKIAC) to recover $84 million from Roger Ver, popularly known as ‘Bitcoin Jesus.’ It also presented a proposal for how it might deal with the mismatch in its assets and liabilities.
“The interim plan is that each depositor of CoinFLEX will be allocated pro-rata one of each of the following instruments:
- rvUSD – represents recovery from the defaulting person
- Equity – shares in CoinFLEX
- FLEX Coin – a small amount of locked FLEX Coin.”
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