CoinFLEX had announced that it will be halting all withdrawals. This move came as another shock amidst this ongoing crypto winter with huge declines in crypto value and counterparty uncertainty. This move was triggered by an outstanding debt that a high-net-worth customer owes the exchange. CoinFLEX is now launching a recovery value USD (rvUSD) coin.
The company has issued a total of $47 million in tokens after an account went to negative equity due to the ongoing fall in crypto prices. CoinFLEX announced that this issuance of tokens will continue from today (June 29) till July 1. The company said, “In normal circumstances, we would auto-liquidate a position that runs low on equity at prices that are prior to the zero-equity price.”
Speaking about the account holder in question, the company used the words “high integrity” to describe the individual. The individual had liquidity issues tied to the recent crypto crash and other markets that have crumbled alongside it. CoinFLEX says that the individual had, “significant shareholdings in several unicorn private companies and a large portfolio.”
The crypto exchange will accrue a 20% annual percentage rate (APR) and pay in rvUSD daily during this ongoing issuance. The exchange is currently waiting to receive more funds to continue the rvUSD issuance. CoinFLEX’s CEO, Mark Lamb, said “We have been speaking to potential large buyers and believe there is significant interest in the terms presented,” in a blog post.
CoinFLEX also announced that they would be increasing the transparency involved in the process. This would make the process of future positions, the notional value of accounts, and the margin more transparent. The company will use an external auditing firm to do so.