Seychelles Court Approves CoinFLEX Restructuring Plan

A Seychelles court has approved the restructuring plan tabled by the Hong Kong-based crypto derivatives exchange CoinFLEX, the company said in a statement Tuesday.

“We are pleased to confirm that on Monday, March 6th, 2023, CoinFLEX’s restructuring was approved by the Seychelles courts,” said the exchange.

CoinFLEX didn’t provide details on the next steps, saying that the court’s written order is expected to be published this week and will be shared immediately after that.

Per the firm’s release, trading in locked assets, including LETH and LUSD, on the exchange will remain closed until the exchange publishes the written court order.

Decrypt has reached out to CoinFLEX for additional commentary.

CoinFLEX’s troubles

CoinFLEX halted withdrawals from its platform at the end of June 2022, citing “extreme market conditions” and “continued uncertainty involving a counterparty.”

All futures and spot trading for the company’s native token FLEX was put on hold as well.

The exchange later identified that the counterparty was early Bitcoin investor and Bitcoin Cash (BCH) promoter Roger Ver. CoinFLEX accused Ver of defaulting on a $47 million loan, which he denied.

That figure was later updated to $84 million, with CoinFLEX entering arbitration with Ver in a Hong Kong court.

In August 2022, CoinFLEX initiated the restructuring process in the Seychelles, seeking approval from depositors and the court on its proposed plan to issue depositors with rvUSD tokens, equity, and a locked version of the platform’s native token FLEX coin.

In the restructuring plan, the crypto exchange had proposed that creditors will own 65% of the exchange. It also proposed that Series A investors would lose their equity stakes.

A series of notable events followed this year as CoinFLEX co-founder and CEO Mark Lamb also surprisingly joined forces with Su Zhu, the co-founder of bankrupt crypto hedge fund Three Arrows Capital (3AC), to launch OPNX—an exchange for “trapped creditor claims” from entities such as FTX, Voyager, and Celsius.

Last month, CoinFLEX also claimed that the popular crypto exchange Blockchain.com owed it over $4.3 million in FLEX tokens, something Blockchain.com referred to as “completely false.”