Crypto exchange CoinFlex won’t lift withdrawal freeze yet, despite ‘significant progress’ in rescue token fundraising, CEO says


CoinFlex cryptocurrency exchange, 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 MarketWatch.

The exchange has been trying to raise $ 47 million in stablecoin USDC USDCUSD,
+ 0.01%
since Tuesday through the sale of a token called Recovery Value USD, or rvUSD, in an attempt to allow withdrawals to resume, the company said earlier in a blog post on Monday.

CoinFlex said it expects its symbolic fundraising efforts to run for four days and conclude this Friday, in the rvUSD white paper. The post on the company’s blog earlier this week said the goal was resume compliance with user withdrawals on Thursday, subject to receiving funds from the issuance of rvUSD.

The cryptographic exchange has held talks with troubled debt funds, existing customers and investors about listing chips and is “making significant progress,” Lamb told MarketWatch. He declined to reveal how many tokens have been subscribed to, but said tens of millions of dollars have arisen “in soft commitments.”

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

The freeze on the withdrawal of CoinFlex came after cryptocurrency lenders Celsius and Babel Finance made similar moves, as major cryptocurrencies BTCUSD ETHUSD crashed.

On Tuesday, lamb he tweeted Roger Ver, one of the first cryptocurrency investors, founder of bitcoin.com and a vocal advocate of Bitcoin cash BCHUSD,
-1.83%,
had breached financial commitments with CoinFlex, alleging that Ver owed the exchange $ 47 million USDC. Ver is also an investor in CoinFlex.

Reads: CoinFlex says one of the industry’s top names paid off a $ 47 million USDC debt.

Ver he tweeted Tuesday that false rumors were spreading that he was defaulting on debt with a counterparty. “Not only do I not have a debt with this counterparty, but it owes me a substantial amount of money and I am currently seeking a refund of my funds,” Ver wrote. Ver did not identify the counterparty.

When asked Wednesday about Lamb’s claims about his default, Ver said, “I’m pending my original tweet,” in an email to MarketWatch. “I will make more public information as soon as possible,” he wrote.

Lamb, and the white paper, pointed to a flaw in a major CoinFlex customer as a catalyst for the platform’s liquidity problems. Lamb said he revealed Ver’s identity as a relevant customer due to Ver’s refusal in a tweet, but also for clearing the air for the issuance of the testimony. “Since we revealed these details, there have been a significant number of potential outside buyers who have come out of the woods because of who the counterparty is,” Lamb told MarketWatch.

RvUSD investors basically bet that the defaulted individual will pay the relevant debt and interest to CoinFlex. could offer an rvUSD token up to 20% annual return, according to its white paper.

The white paper also said that token holders have the option to be reimbursed directly through CoinFlex, if the company could not fully recover the liabilities within 15 months. When asked if it would pose more risk to the exchange, Lamb said the company is still finalizing the final terms with token buyers, while they are also “very confident they can recover those assets.”

Lamb said CoinFlex stays in conversations with the incomplete person. “We will also take all the appropriate action we need to take to resolve this issue, but we are still talking to him, and we would like to reach a friendly agreement.”

Lamb said CoinFlex opted to collect tokens to try to resume withdrawals because options for legal action could be lengthy and the situation could be “much worse for customers in terms of the speed of recovery of some or all its funds “.

“In this situation, we can follow a different path where through tokenization, we can get users back, ideally all their funds, and that can be done quickly,” Lamb said.

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





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