Crypto exchange CoinFlex won’t lift withdrawal freeze just yet, despite ‘significant progress’ in fundraising for bailout tokens, CEO says – CNET – ApparelGeek

Crypto exchange CoinFlex, which has halted user withdrawals since June 23, will not lift the freeze on Thursday as originally planned, Mark Lamb, the company’s chief executive, told CNET.

The exchange attempted to raise $47 million in USDC USDCUSD stablecoin,

since Tuesday through the sale of a token called Recovery Value USD, or rvUSD, in an effort to allow withdrawals to resume, the company said earlier in a blog post on Monday.

CoinFlex said it expects its token fundraising efforts to take place over four days and conclude this Friday, in the rvUSD whitepaper. The company’s blog post earlier this week said the goal was to resume the honor of user withdrawals on Thursday, subject to receiving funds from the rvUSD issuance.

The crypto exchange engaged in talks with distressed debt funds, existing customers and investors about the token sale, and “made significant progress,” Lamb told CNET. He declined to reveal how many tokens were subscribed, but said tens of millions of dollars “in soft commitments” emerged.

Lamb said the company will update the market with its fundraising status on Thursday and “continue down the path to resolution.”

CoinFlex’s withdrawal freeze came after crypto lenders Celsius and Babel Finance took similar action as major cryptocurrencies BTCUSD ETHUSD crashed.

Tuesday, Lamb tweeted that the Roger Ver, an early crypto investor, founder of bitcoin.com and a strong supporter of Bitcoin cash BCHUSD,
-1.83%,
had defaulted on its financial commitments to CoinFlex, alleging that Ver owed the exchange $47 million USDC. Ver is also an investor in CoinFlex.

Lily: Crypto exchange CoinFlex says one of the biggest names in the industry has defaulted on $47 million USDC in debt.

Worm tweeted tuesday that false rumors were spreading that he had defaulted on a debt to a counterparty. “Not only am I indebted to this counterparty, but this counterparty owes me a substantial amount of money, and I am currently seeking the return of my funds,” Ver wrote. Ver did not identify the counterparty.

Asked about Lamb’s claims about his default on Wednesday, Ver said, “I stand by my original tweet,” in an email to GameSpot. “I will make more information public as soon as possible,” he wrote.

Lamb – and the whitepaper – pointed to the default of a major CoinFlex customer as the catalyst for the platform’s liquidity issues. Lamb said he revealed Ver’s identity as an affected customer due to Ver’s denial in a tweet, but also to clear the air for the token’s issuance. “Since we revealed these details, there have been a significant number of external potential buyers who have come out of the woodwork because of who the counterparty is,” Lamb told GameSpot.

Investors in rvUSD are essentially betting that the defaulter would repay the debt and corresponding interest to CoinFlex. The rvUSD token could offer up to 20% annual return, according to its white paper.

The whitepaper also stated that token holders had the option of being reimbursed directly through CoinFlex, if the company could not fully recover the liability in 15 months. When asked if this would bring more risk to the exchange, Lamb said the company is still finalizing final terms with token buyers, while they are also “very confident that they can get those assets back.”

Lamb says CoinFlex is staying in talks with the defaulting party. “We will also take all appropriate steps we need to take to resolve this matter, but we are still talking to him and would like to reach an amicable agreement on this.”

Lamb said CoinFlex chose to raise the tokens in an effort to start honoring withdrawals again because the options for legal action could be lengthy and the situation could be “much worse for customers in terms of speed of recovery. of all or part of their funds”.

“In this situation, we can go a different route where through tokenization we can get users back, ideally their entire funds, and it can be done quickly,” Lamb said.

CoinFlex’s native token, FlexUSD, is trading at around $0.40 on Wednesday, down 30% from 24 hours ago and 60% from seven days ago, according to data from CoinGecko.



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Crypto exchange CoinFlex won’t lift withdrawal freeze just yet, despite ‘significant progress’ in fundraising for bailout tokens, CEO says – CNET – ApparelGeek


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