Beleaguered cryptocurrency exchange CoinFLEX has announced a restructuring plan more than a month after it filed with a Seychelles court. It was one of several firms that went into restructuring after the cryptocurrency crash earlier this year.
According to the latest blog post, CoinFLEX’s creditors will own 65% of the company, while all existing common and Series A shareholders will lose their ownership stakes. The CoinFLEX team will be awarded 15% in the form of an employee share option plan that will vest over time, the statement said. The motive is to help the team “get back on track” and develop the business.
Series B investors, on the other hand, will continue to be shareholders in the reorganized business and will be incentivized by future equity. A vote on the new proposal is scheduled for next week and will require the approval of 75% of creditors based on the value of CoinFLEX’s CFV token.
If the proposal passes, the exchange will present the timelines and supporting documentation to the Seychelles courts to approve the reorganization. If it doesn’t, the interested parties will have to amend the terms and then go back to all creditors for a second round of voting to seek approval.
If the reorganization plan gets the green light from creditors, satisfies the judge, and conditions are met, CoinFlex estimates the process will take up to six weeks.
“We fully understand that this has been a traumatic experience for all of our depositors and shareholders. We hope that with a successful reorganization we will return to the path of growth and becoming a successful stock exchange. It won’t be overnight, nor easy, but with the support of our new army of shareholders – you guys – we have every chance of achieving that goal.”
The proposal also mentions that the BCH Alliance will take responsibility for the SmartBCH Bridge and use its own BCH to exchange sBCH tokens held by DeFi SmartBCH users on a 1:1 basis. In the meantime, creditors will receive USD return (rvUSD), equity and USDC stablecoin.
In late June, CoinFLEX announced a halt to withdrawals from its platform as a result of “extreme market conditions” and “continued uncertainty involving the counterparty”. Platform co-founder Mark Lamb later identified the BCH proponent, Roger Ver, as the opposite party and accused him of defaulting on a $47 million loan.
However, Ver dismissed the allegations and instead lashed out at CoinFLEX, claiming the investment platform owed him money. The amount was later revised to $84 million, and the exchange entered into arbitration with Vera in a Hong Kong court.
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