Crypto Exchange CoinFlex Initiates Restructuring Process In A Seychelles Court

Seychelles-headquartered cryptocurrency exchange CoinFlex has filed for restructuring in a court in the archipelagic island country. The company aims to resolve a shortfall created by a client missing a margin call.

According to Bloomberg, CoinFlex sent out emails regarding the restructuring filing Tuesday, adding that it is looking for approval from the depositors and court on a proposal to issue depositors with (Recovery Value USD) rvUSD tokens.

CoinFlex stopped withdrawals on June 23 due to "extreme market conditions" and "continued uncertainty involving a counterparty." The withdrawals were resumed on June 30 with the creation of a corresponding liability in the form of rvUSD tokens for raising money.

"We look forward to welcoming a new group of shareholders to CoinFLEX and are glad to be in a jurisdiction where we can quickly resolve this situation and return maximum value to depositors," Mark Lamb, chief executive officer of CoinFlex, told Bloomberg.

The crypto exchange aims to resolve the issue by promising a 20% return for the rvUSD token holders and if the full amount is raised, users will be allowed to gain access to all their funds.

On July 29, 2022, the firm revealed that it has reduced its cost base by approximately 50-60% and laid off "a significant number" of employees.

"The staff cuts and non-staff costs that we have made will reduce our cost base by approximately 50-60%. The majority of the team that remain are focused on product and technology, which remains the core of our business," the firm said at that time.

Interestingly, according to previous reports, Lamb claimed that Roger "Bitcoin Jesus" Ver defaulted on a $47 million USDC margin call which is the reason for the firm's current state. The crypto exchange has to recover $84 million from Ver, as per Bloomberg.

However, Ver, an early investor in Bitcoin and a supporter of Bitcoin Cash (BCH) cryptocurrency, denied that he defaulted on the margin call.