CoinFLEX Will Issue A $47 Million Recovery Token To Solve Withdrawal Problems
Following the recent suspension of withdrawals due to an unpaid debt owed to the exchange by a high-net-worth customer, cryptocurrency exchange CoinFLEX will launch a Recovery Value USD (rvUSD) Token.
A certain person’s account experienced a negative equity during the recent market turbulence, which prompted CoinFLEX to issue $47 million in tokens. According to a whitepaper published by CoinFLEX on Monday, the issue will start tomorrow and probably last through July 1.
“In normal circumstances, we would auto-liquidate a position that runs low on equity at prices that are prior to the zero-equity price,” the company wrote.
The customer was characterized by CoinFLEX as having “significant shareholdings in several unicorn private companies and a large portfolio,” as well as liquidity issues related to the recent downturn in crypto and non-crypto markets.
According to the crypto exchange, the issue includes a daily rvUSD accrued annual percentage rate (APR) of 20%.
“We have been speaking to potential large buyers and believe there is significant interest in the terms presented,” CoinFLEX CEO Mark Lamb said in a blog post.
CoinFLEX anticipates starting withdrawals again on June 30, however it is still liable to receive money in accordance with the rvUSD issuance.
On Bloomberg TV on Monday night, when questioned about a potential bank run, CEO Mark Lamb said he wasn’t worried about it happening since consumers could withdraw their money after the new token fundraise was over. Lamb said that the company intends to increase transparency for current holdings, notional account value, and margin and will do so by working with an outside auditing company.
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