CoinFLEX Plans To Raise Missing Funds With New Token

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  • Coin­FLEX hopes to raise $47 mil­lion with a new token
  • If all funds are raised, cus­tomers will be able to with­draw­al in full

Four days after sus­pend­ing with­drawals fol­low­ing an unnamed counterparty’s unmet mar­gin call, cryp­tocur­ren­cy exchange Coin­FLEX will be issu­ing a new token with the hopes of rais­ing $47 million.

“We’re turn­ing a prob­lem into an oppor­tu­ni­ty,” Mark Lamb, CEO of Coin­FLEX said dur­ing an inter­view with Bloomberg Monday. 

The token will have a 20% yield, and, if the full amount of $47 mil­lion is raised, all Coin­FLEX users will be able to with­draw their funds in full, Lamb said. 

“There’s oth­er options being made avail­able as well — we’re going to do every­thing pos­si­ble to ensure that users funds are made whole and with­drawals enabled,” Lamb wrote in the exchange’s Telegram chat fol­low­ing the interview.

When asked if there were con­cerns about a run risk, Lamb said these would be unfounded. 

“We’re not wor­ried about that sce­nario because upon this fundraise being con­clud­ed, every­one can with­draw,” Lamb said. “We want every­thing to be matched, at all times.” 

Coin­FLEX announced on June 23 that the exchange was halt­ing all with­drawals and trad­ing of its in-house FLEX token. 

“Due to extreme mar­ket con­di­tions last week & con­tin­ued uncer­tain­ty involv­ing a coun­ter­par­ty, today we are announc­ing that we are paus­ing all with­drawals,” the exchange wrote at the time. “We ful­ly expect to resume with­drawals in a bet­ter posi­tion as soon as possible.” 

The exchange will also pledge to make lever­aged posi­tions more trans­par­ent going for­ward, Lamb said. 

“We will be mak­ing these posi­tions pub­lic, we have an audit­ing firm we will be work­ing with,” Lamb said. “This is much-need­ed data, there isn’t a sin­gle futures exchange in the world that makes these posi­tions public.” 

There’s a bal­ance between trans­paren­cy and pri­va­cy, though, Lamb not­ed. The exchange will not be reveal­ing the iden­ti­ty of the unnamed coun­ter­par­ty with the unmet mar­gin call at this time. 

When asked if Coin­FLEX might opt to sell in the event that the token issuance fails to raise the need­ed $47 mil­lion, Lamb respond­ed that this was “pos­si­ble,” but “we think the busi­ness is worth keeping.” 

“Plus there’s sig­nif­i­cant inter­est in the token, so it’s def­i­nite­ly the best option,” he added.


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  • Casey Wag­n­er

    Block­works

    Senior Reporter

    Casey Wag­n­er is a New York-based busi­ness jour­nal­ist cov­er­ing reg­u­la­tion, leg­is­la­tion, dig­i­tal asset invest­ment firms, mar­ket struc­ture, cen­tral banks and gov­ern­ments, and CBD­Cs. Pri­or to join­ing Block­works, she report­ed on mar­kets at Bloomberg News. She grad­u­at­ed from the Uni­ver­si­ty of Vir­ginia with a degree in Media Studies.

    Con­tact Casey via email at [email pro­tect­ed]

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