Crypto futures exchange CoinFLEX is reportedly seeking court approval for a restructuring plan as it faces financial trouble following a substantial default by one of its customers.
Citing an email sent to CoinFLEX creditors on August 9th, Fortune reports that the embattled firm filed to the Seychelles Supreme Court an application for the reorganization and restructuring of the company.
CoinFLEX issues the notice in compliance with a court order and as prescribed by the IBC Act, Seychelles’ law governing international business companies (IBCs).
“Notice is given to the creditors of the above-named Company, that the Company has filed an application under section 208 of the IBC Act for the reorganization or reconstruction of the Company under the supervision of the Seychelles Supreme Court pursuant to section 208 of the IBC Act.”
CoinFLEX halted customer withdrawals in June amid increased volatility in the crypto market. The embattled company says it is experiencing financial distress partly because a customer failed to settle a huge debt.
The exchange has already initiated legal action in the Hong Kong International Arbitration Centre (HKIAC) to recover $84 million from Roger Ver, popularly known as ‘Bitcoin Jesus.’ It also presented a proposal on how it can address the mismatch in its assets and liabilities.
“The interim plan is that every depositor of CoinFLEX will be pro-rata allocated one of each of the following instruments:
- rvUSD – representing the recovery from the defaulting individual
- Equity – shares in CoinFLEX
- FLEX Coin – a small amount of locked FLEX Coin.”
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