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

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

Subject to a vote and court approval, the plan proposed CoinFlex creditors own 65% of the company, while its team members be allocated 15% of the company’s shares.

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

In a Wednesday blog post, CoinFlex said under the proposal — which will be subject to a vote and then court approval— creditors will own 65% of the company, while its team members will be allocated 15% of shares as part of an employee share option plan. According to the platform, Series B investors would remain shareholders in the restructured company should the plan be approved.

“As with any reorganization, unfortunately, most shareholders get wiped out,” said CoinFlex CEO Mark Lamb and chief revenue officer Sudhu Arumugam. “This situation is no different; with all existing Ordinary and Series A shareholders of the Company losing their equity stakes, including us.”

The platform added that it would be offering creditors its recovery token rvUSD, equity and USD Coin (USDC) 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 the sBCH Tokens held by the DeFi SmartBCH users on a 1:1 basis.”

The exchange suspended withdrawals in June, later claiming one “large individual customer” had defaulted on tens of millions of dollars in debt to CoinFlex, causing liquidity issues. Lamb called out BCH proponent Roger Ver for being this individual, while he, in t has denied the exchange’s claims.

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