CoinFLEX, a crypto exchange, filed for restructuring on Tuesday in a Seychelles court.
The futures crypto exchange said they have to remedy a shortfall brought by a creditor who struggled to reach a margin call. CoinFlex reported that it had written an email to its customers informing them of the reorganization process.
The company added that it planned to seek consent from depositors and the court before submitting a proposal to award depositors with equities, locked FLEX coins, and restoration value USD (rvUSD) tokens.
said Mark Lamb, chief executive officer of CoinFlex.
CoinFlex Halted Withdrawals in June
Due to challenging market conditions, CoinFLEX halted client payouts on June 23. The exchange gave two reasons for stopping all withdrawals: severe market circumstances and uncertainty regarding a counterparty.
Along with spot and perpetual trading, the business also halted trading of FLEX Coin (FLEX), its native cryptocurrency.
To revive upwards of $84 million in debt due by a “major individual client,” the company put up a plan to reimburse depositors and strengthen its financial position on July 22.
After a user’s account lost money during the most recent market meltdown, which impacted client balances, CoinFLEX stopped allowing withdrawals in June. Later, the business revealed that the person was well-known cryptocurrency investor Roger Ver. Ver, though, refuted these allegations online.
CoinFLEX resumed limited withdrawals in the middle of last month to minimize expenses, allowing consumers to take 10% of their amount for a week.
The company also stated its intention to work tirelessly on recovery strategies that would allow it to regain solvency. The corporation also discussed the potential for additional repayments, new potential shareholders, and corporate purchases.
These options were presented in early July 9, when it was stated that CoinFLEX intended to attract capital from new investors, raise money through its Recovery USD (rvUSD) token, and seek out depositors wishing to convert their deposits into equity.
In late June, Roger Ver, the client, and CoinFLEX moved into arbitration through the Hong Kong judicial system. However, the company warned that it might take up to a year to obtain a judgment and apply it to Ver’s assets.
After the June cryptocurrency market fall, several businesses, including CoinFLEX, stopped allowing customer withdrawals.