CoinFLEX is one of the crypto exchanges that suffered during the bearish trend and is currently paving for restructuring. Following its filings for reorganization at s Seychelles court, the exchange released its restricting plan.
The crypto winter in the year’s first half brought severe drought to several crypto assets. As a result, the entire crypto market lost several billions of dollars as the value of the assets kept dropping. The crisis became worse with the collapse of the algorithmic stablecoin Terra and its ecosystem.
Then came the crumbling of lots of crypto-related firms in the following months. Some companies used measures to wade off the impact and survived the crisis. However, most employees of the affected firms were laid off. Also, other drastic measures were implemented to cut down the cost of operation for the companies.
However, some firms could not survive the storm as the crisis intensity increased. Hence, some distressed firms filed for bankruptcy to hold back legal actions from users.
CoinFLEX Restructuring PlanAccording to details, CoinFLEX is giving its creditors 65% shares of the firm. Its team will receive 15%, an employee share option plan that will vest with time. The aim is to assist the team in getting back on its work and grow the firm again.
There seems to be no hope for all CoinFLEX existing ordinary and Series A shareholders. They will possibly lose their equity stakes on the exchange. However, the company plans to retain the shareholding positions of its Series B investors. As a result, they will receive rewards with future equity of the firm.
Having laid its plan, there will be a vote on the new proposal by next week. According to the value of CoinFLEX’s CFV token, the restructuring plan will need the approval of about 75% of the creditors.
If the proposal passes, CoinFLEX will seek approval for restructuring the Seychelles courts. This will be by presenting the courts with the term sheet and other supporting documents. But once the proposal fails, the stakeholders will move back to their drawing table to readjust the term. Then, there will be another voting round by the creditors for possible approval.
CoinFLEX estimated six weeks for the entire process to move seamlessly. This involves reaching the required terms, getting positive votes from creditors, and satisfying the judge.
Fall Of Crypto Exchange CoinFLEXDue to the crypto winter in the first half of the year, CoinFLEX lost its footing. The exchange later halted withdrawals from its platform and noted the influence of continued uncertainty with a counterparty.
Cryptocurrency market trends in red | Source: Crypto Total Market Cap on TradingView.comLater, Mark Lamb, the co-founder of CoinFLEX, pointed out that a proponent of BCH, Roger Ver, was the counterparty. Lamb alleged that Ver defaulted on a loan of $47 million from the exchange.
Ver denied the accusations and fought the exchange on the ground that CoinFLEX owed to him. Following that was the exchange’s arbitration with Ver in a Hong Kong court, as the debt amount was reported as $84 million.
Featured Image from Pixabay | Charts by TradingView
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