CoinFlex Creditors Show Over 99% Support For Restructuring Proposal

Following early voting designed to decide whether its creditors and lenders will back its application for restructuring, the Seychelles-based exchange CoinFlex has experienced a good turn of events. Creditors of the beleaguered crypto exchange have proven to be supportive of the company’s recent decision to restructure following the hit it experienced in June. 

Based on the result from the IPFS decentralized storage system-based voting tool Snapshot, it has been discovered that over 99% of creditors of CoinFlex are in support of its restructuring proposal. Voting has lasted for over 24 hours so far and is still ongoing but it is scheduled to conclude on Monday 26th of September. 

Due to a failure on the part of a counterparty identified as Roger Ver, to pay a marginal call in June, including exposure to prevalent extreme market conditions, CoinFlex suspended withdrawal on its platform with the promise to resume shortly. A few weeks after, the exchange published details on how customers can go about the withdrawal of their assets with certain conditions attached to it.

One such condition was that “any new smartBCH deposits made by a CoinFLEX user will have 90% of the deposit amount locked. This leaves 10% of it to be used on the platform and withdrawn as BCH.”

Almost immediately, the firm decided to trim down its staff strength by up to 60% in a bid to reduce its cost of operation and maintain stability.

CoinFlex Submit Restructuring Proposal

After all of these, CoinFlex submitted a petition to the Seychelles Islands authority requesting permission for restructuring. The beleaguered crypto exchange planned to refund investors’ funds to them but at that time, only 10% of their client’s funds were available for withdrawal. 

In effect, CoinFlex sought permission to offer RecoveryUSD (rvUSD), equity, and the platform’s own FLEX coin to apprehensive clients requesting their funds. This wasn’t likely to turn out well as most users would prefer to withdraw their funds in a variety of digital currencies.

Only a few days ago the restructuring proposal was approved and announced. As part of the proposal, CoinFlex planned to give 65% of its assets to creditors while 15% remained for the CoinFlex team to be vested under an employee stock option plan (ESOP). In addition, CoinFlex wiped all investors in its Series A funding round and maintained those from Series B.

Hence, the reason for setting up the Snapshot voting tool is to ascertain those in support of the terms of agreement of its restructuring proposal.