CoinFLEX Proposes Plan to Compensate Depositors, Restructure Business

The exchange wants to issue new recovery tokens and also give depositors equity in the firm and locked FLEX Coins.

AccessTimeIconJul 22, 2022 at 3:57 p.m. UTC
Updated Jul 22, 2022 at 4:47 p.m. UTC

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

Crypto exchange platform CoinFLEX has proposed a plan to compensate depositors and shore up its financial situation as it seeks to recover over $84 million in debt owed by a “large individual customer.”

CoinFLEX suspended withdrawals last month after the individual's account suffered a loss during June’s market volatility, affecting the balances of the exchange's customers. CoinFLEX CEO Mark Lamb later disclosed that individual was prominent crypto investor Roger Ver, a claim that Ver denied on social media.

In a Friday blog post, CoinFLEX laid out four ideas to “address the mismatch between our available assets and liabilities caused by the individual who breached his contract with us.” The exchange’s proposal is as follows, according to CoinFLEX’s post:

  • CoinFLEX will issue depositors recovery value USD (rvUSD) tokens, equity and locked FLEX coins on a pro rata basis
  • Depositors get to approve the new structure and path CoinFLEX will take
  • Further distribution of existing balances will be made available
  • “Locked balances” markets will be created and tradable next week

CoinFLEX's plan needs to be voted on by its depositors, and nothing has been finalized. The exchange said it plans to host a video session next week to answer questions from its community. Co-founders Sudhu Arumugam and Mark Lamb also said they may appear on YouTube or a podcast next week to discuss their vision for reviving the platform.

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

CoinDesk - Unknown

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

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