The issuance of the new token is set to begin on June 28 and will likely run until July 1, the company’s whitepaper revealed.
Cryptocurrency exchange CoinFlex is set to issue a new token dubbed the “Recovery Value USD Token” in an attempt to resume withdrawals on the platform. The latest development comes four days after halting withdrawals from the platform after an unnamed client failed to repay a $47 million debt.
According to CoinFlex, the company will issue $47 million tokens that will offer a 20% annual percentage rate (APR) accrued and paid daily in rvUSD. The level of demand for the new token will, however, determine when withdrawals resume, which is planned to start on June 30.
The customer was described by CoinFLEX as a high-integrity individual with “substantial shareholdings in many unicorn private companies and a large portfolio,” as well as “liquidity issues related to the recent crash in the crypto and non-crypto markets.
In an interview on Monday, Mark Lamb, CEO of CoinFLEX, stated that the company was turning a problem into an opportunity, adding that all users would be able to withdraw their funds in full if the full amount of $47 million is met.
“There are other options being made available as well. We’re going to do everything possible to ensure that users’ funds are made whole and withdrawals enabled,” Lamb stated. Lamb also stated that the company has been speaking to potential large buyers and believes there is strong interest in the terms given.
The issuance of the new token is set to begin on June 28 and will likely run until July 1, the company’s whitepaper revealed. “In normal circumstances, we would auto-liquidate a position that runs low on equity at prices that are before the zero-equity price,” the company stated.
When asked if there were concerns about a run risk, Lamb said these would be unwarranted. “We’re not worried about that scenario because upon this fundraise being concluded, everyone can withdraw,” he stated. “We want everything to be matched, at all times.”
According to Lamb, the exchange will not reveal the identity of the said client with the unmet margin call at this time. However, he promised that the crypto exchange plans to make leveraged positions more transparent moving forward and will use an external auditing firm to do so.
“We will be making these positions public, we have an auditing firm we will be working with,” Lamb said. “This is much-needed data, there isn’t a single futures exchange in the world that makes these positions public.”
On June 23, CoinFLEX made the announcement that it was freezing all trading and withdrawals of its FLEX token.
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