Home CryptocurrencyAltcoin Coinflex plans to give 65% of the company to creditors as part of a restructuring proposal

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

by SuperiorInvest

Cryptocurrency exchange CoinFlex has announced a proposed restructuring in response to user feedback after the platform faced liquidity issues.

In Wednesday’s CoinFlex blog post he said under the proposal – which will be subject to a vote and subsequent court approval – creditors will own 65% of the company, while members of its team will be allocated 15% of the shares under an employee stock 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 existing common stockholders and Series A stockholders of the Company who have lost their equity interests, including us.”

The platform added that it will offer lenders its rvUSD refresh token, equity and USD Coin (USDC) instead of his FLEX Coin. The SmartBCH Alliance would also take responsibility for the SmartBCH Bridge as proposed using its Bitcoin Cash (BCH) to “exchange sBCH tokens held by DeFi SmartBCH users on a 1:1 basis”.

“SmartBCH Alliance will take over as a creditor [CoinFlex] for the amount of BCH it spends on fulfilling these obligations. The alliance will be treated like any other creditor without changing the status of any of the other current creditors.

CoinFlex plans to hold a community vote on the proposed restructuring on September 25th, with 75% of lenders voting yay, which it believes is sufficient for approval. The company will then submit the plan, along with the vote count, to the Seychelles courts for final approval.

“If all goes well, we expect this process to take up to six weeks; however, it is only an estimate,” Lamb and Arumugam said.

Related: CoinFLEX Announces Downsizing of Up to 60% in Cost-Cutting Measures

Exchange withdrawals suspended in June, later claimed that one “large individual customer” had defaulted on tens of millions of dollars in debts owed to CoinFlex, causing liquidity problems. Lamb called out BCH proponent Roger Ver for being that individual while he vt denied the exchange claims.

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