CoinFLEX Announces Restructuring Proposal, Allocating 65% Shares to Creditors
CoinFLEX on Wednesday announced a restructuring proposal and the next immediate steps the crypto exchange will take.
The company released a term sheet in which it said that creditors will own 65% of the CoinFLEX. While, the company's team will be allocated 15% of the remaining shares, to vest over time in an employee share option program (ESOP). CoinFLEX added that Series B investors will also stay as shareholders in the restructured company.
In a letter to CoinFLEX community, it reads:
"As with any reorganization, unfortunately, most shareholders get wiped out. This situation is no different; with all existing Ordinary and Series A shareholders of the Company losing their equity stakes, including us."
The Seychelles-based crypto exchange said that the proposal also includes a deal with the BCH alliance. It would see the alliance assume responsibility for the SmartBCH Bridge. CoinFLEX said the takeover would mean that "BCH on the SmartBCH network will be 1:1 redeemable for BCH via the SmartBCH Alliance," if it is approved.
CoinFLEX also explained that for now, the proposal offers USDC instead of FLEX Coin, while in the past the company had indicated recovery tokens would come in the form of rvUSD, equity, and FLEX Coin.
CoinFLEX said that both Series B investors and the Ad Hoc Group have agreed to the company's use of its FLEX Coin holdings "to grow the business or keep them on the balance sheet, benefiting all shareholders."
CoinFLEX explained the terms of the proposal in an announcement on its website and the exchange said that major stakeholders came to an agreement over the course of their negotiations.
During the next stage, the proposal will be put forward for a community vote which will be held on Snapshot.
CoinFLEX said, "the team will release a separate blog explaining how the voting will work and what steps you need to take to be ready to vote."
"75% of creditors by value who vote are in the affirmative" are needed to get the approval before presenting it to the Seychelles Courts to approve the reorganization, according to the official blog.
According to The Block, "a price recorded at 10:00 am UTC, Sept. 22, 2022, will be used to calculate the dollar value of locked balances."
The restructuring plans were announced via email to customers in August, following the suspension of withdrawals in June due to what the exchange called "extreme market conditions" amid accusations that investor Roger Ver had defaulted on a $47 million loan deal. Ver denied those allegations.
However, in July, withdrawals on CoinFLEX partially resumed.
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