Coinflex plans give 65% of company to creditors as part of restructuring proposal

Cryptocurrency exchange CoinFlex has announced a structure proposal in response to user feedback following the platform experiencing liquidity issues.

In a blog post on Wednesday, CoinFlex said that under the proposal — which will be put to a vote and then court approval — creditors will own 65% of the company, while its team members will see each other. award 15% of the shares as part of an employee share. option plan. According to the platform, Series B investors would remain shareholders of the restructured company if the plan is approved.

“As with any reorganization, unfortunately most shareholders are wiped out,” said CoinFlex CEO Mark Lamb and Chief Revenue Officer Sudhu Arumugam. “This situation is no different; with all of the company’s existing common and Series A shareholders losing their stakes, including us.

The platform added that it will offer its rvUSD recovery token, stocks, and USD Coin (USDC) to creditors instead of its FLEX Coin. The SmartBCH Alliance would also assume responsibility for the SmartBCH bridge under the proposal, using its Bitcoin Cash (BCH) to “exchange sBCH tokens held by DeFi SmartBCH users on a 1:1 basis.”

“The SmartBCH Alliance will take over as creditor of [CoinFlex] for the amount of BCH it spends for the performance of these obligations. The Alliance will be treated like any other creditor with no change in the position of any other current creditors.

CoinFlex plans to hold a community vote on the proposed restructuring on September 25, with 75% of creditors voting yes considered sufficient to pass. The company will then forward the plan along with the vote count to the Seychelles courts for final approval.

“If everything is in order, we expect this process to take up to six weeks; however, this is only an estimate,” Lamb and Arumugam said.

Related: CoinFLEX Announces Staff Cuts as Part of Measures to Cut Costs by Up to 60%

The exchange suspended withdrawals in June, later saying a “large individual customer” defaulted on tens of millions of dollars in debt to CoinFlex, causing liquidity problems. Lamb called BCH promoter Roger Ver to be that individual, as he denied the exchange’s claims.