Troubled cryptocurrency exchange CoinFLEX has released its restructuring plan more than a month after filing it with a Seychelles court. It was one of several companies to restructure 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 stock and Series A shareholders will lose their equity. The CoinFLEX team will allocate 15% in the form of an employee stock option plan that will vest over time, the statement reads. The motivation is to help the team “get back on track” and grow the business.
On the other hand, Series B investors will continue to be shareholders in the restructured business and will receive future equity incentives. A vote on the new proposal, scheduled for next week, requires approval from creditors of 75% of the value of CoinFLEX CFV tokens.
If the proposal passes, the exchange will submit a term sheet and supporting documents to the Seychelles courts to approve the reorganization. If not, stakeholders will have to revise the terms and then return to all creditors for a second round of voting for approval.
CoinFlex estimates the process could take up to six weeks if the restructuring plan is approved by creditors, satisfied with the judge’s demands and agreed to terms.
“We fully recognize that this has been a painful experience for all of our savers and stakeholders. We hope to get back on the path of growth and become a successful exchange through a successful restructuring. It will not happen overnight. , it won’t happen overnight, but with the support of our new army of shareholders — you — we have every opportunity to make it happen.”
The proposal also mentions that the BCH Alliance will assume the responsibility of the SmartBCH bridge and use its own BCH to exchange sBCH tokens held by DeFi SmartBCH users in a 1:1 manner. At the same time, creditors will receive Recovery Value USD (rvUSD), equity and USDC stablecoins.
In late June, CoinFLEX announced it was halting withdrawals from its platform due to “extreme market conditions” and “ongoing uncertainty involving counterparties.” The platform’s co-founder, Mark Lamb, later identified BCH backer Roger Ver as a counterparty and accused him of defaulting on a $47 million loan.
However, Ver dismissed the allegations and instead lashed out at CoinFLEX, claiming that the investment platform owes him money. That amount was later revised to $84 million, and the exchange went to arbitration with Ver in a Hong Kong court.
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