Crypto Exchange CoinFLEX Plans $84M Restructuring in Seychelles

Crypto derivatives exchange CoinFLEX is seeking a quick resolution to its latest legal woes as it files for restructuring in a Seychelles court, according to Bloomberg.

The exchange, which intends to raise $84 million to pay down its debt, is seeking approval from depositors and the court on its proposed plan to issue rvUSD tokens to depositors, equity and a locked version of the platform’s original token FLEX coin .

According to the report, CoinFLEX informed customers about the restructuring process via email on Tuesday.

“We look forward to welcoming a new group of shareholders to CoinFLEX and are pleased to be in a jurisdiction where we can quickly resolve this situation and return maximum value to depositors,” said CoinFLEX CEO Mark Lamb Bloomberg.

The CoinFLEX saga

CoinFLEX halted withdrawals from its platform in late June, citing “extreme market conditions” and “continued uncertainty involving a counterparty.”

The exchange later identified that the counterparty was the early one Bitcoin (BTC) pioneer and investor turned Bitcoin Cash (BCH) promoter Roger Ver accuses him of defaulting on a $47 million loan – something Ver himself denies.

This figure was later updated to $84 million, with CoinFLEX entering into arbitration with Ver in a Hong Kong court.

The exchange also created a corresponding liability in the form of a liability token called “Recovery Value USD” (rvUSD), which it intends to sell to resolve a shortfall created after “a certain high net worth individual” failed to provide the liquidity that required to meet his margin call.

CoinFLEX has since made 10% of user funds available for withdrawal, although the majority of customer deposits remain unavailable.

Last week, in a move aimed at cutting costs, the exchange also announced a staff reduction affecting “a significant number of the CoinFLEX team across all departments and geographies.”

“The intent is to remain the right size for any entity considering a potential acquisition or partnership opportunity with CoinFLEX,” the company said at the time.

Regarding the proposed restructuring, in addition to finalizing the instruments necessary to deal with what CoinFLEX calls “the mismatch between our available assets”, the exchange also plans to create the so-called “Locked Balances Markets” – they will be traded against unlocked balances on the Platform.

The idea, which the company put forward in a recent blog post, is that users who want more immediate liquidity on their frozen funds can exit their positions or sell them to clients interested in the proposed recovery plan involving the rvUSD token, equity, and FLEX- the coin.