CoinFLEX to Launch a $47M Recovery Token to Solve Withdrawal Issues

The exchange said last week it was halting withdrawals amid market declines and counterparty uncertainty.

AccessTimeIconJun 27, 2022 at 11:27 p.m. UTC
Updated May 11, 2023 at 6:54 p.m. UTC

Physical futures crypto exchange CoinFLEX will launch a Recovery Value USD (rvUSD) Token after recently halting withdrawals stemming from an outstanding debt that a high-net-worth customer owes the exchange.

CoinFLEX's issuance of $47 million in tokens comes after a certain individual’s account went into negative equity during recent market volatility. The issuance will begin tomorrow and likely run until July 1, CoinFLEX wrote in a white paper Monday.

  • Cost of Not Enacting Crypto Regulation Is 'Extremely High,' Legal Expert Says
    01:31
    Cost of Not Enacting Crypto Regulation Is 'Extremely High,' Legal Expert Says
  • DCG Reaches In-Principle Deal With Genesis Creditors
    02:26
    DCG Reaches In-Principle Deal With Genesis Creditors
  • Crypto Custodian Prime Trust Files for Bankruptcy
    02:06
    Crypto Custodian Prime Trust Files for Bankruptcy
  • FTX’s Bankruptcy Fees on Track to Be 'Very Expensive', Court Examiner Says
    05:48
    FTX’s Bankruptcy Fees on Track to Be 'Very Expensive', Court Examiner Says
  • "In normal circumstances, we would auto-liquidate a position that runs low on equity at prices that are prior to the zero-equity price," the company wrote.

    CoinFLEX described the customer as "high integrity" individual with liquidity issues tied to the recent crash in crypto and noncrypto markets who has "significant shareholdings in several unicorn private companies and a large portfolio."

    CoinFLEX said the issuance includes a 20% annual percentage rate (APR) accrued and paid daily in rvUSD.

    "We have been speaking to potential large buyers and believe there is significant interest in the terms presented," CoinFLEX CEO Mark Lamb said in a blog post.

    CoinFLEX expects to resume withdrawals June 30, but is still subject to receiving funds pursuant to the rvUSD issuance.

    When asked of a potential bank run on Bloomberg TV Monday evening, CEO Mark Lamb said he’s unconcerned this scenario would occur as customers can withdraw their funds once the new token fundraise is complete. Lamb also said CoinFLEX plans to boost transparency for future positions, notional value of accounts, margin, and will use an external auditing firm to do so.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Author placeholder image

    Michael Bellusci is CoinDesk's crypto reporter focused on public companies and digital asset firms.