The crypto exchange businesses that allow customers to trade cryptocurrencies for fiat money or other cryptocurrencies. platform a place to buy, sell and store cryptocurrency specializing in physical futures a futures contract is a standardized legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future. found a solution to its withdrawal problem: launch a new token.
- CoinFLEX froze withdrawals last week.
- A businessman left a debt of almost USD $50 million.
- The platform plans to issue a token to address a place where cryptocurrency can be sent to and from, in the form of a string of letters and numbers. the debt.
- He expects to launch the token and resume withdrawals this week.
CoinFLEX a cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. exchange that announced last week that it was suspending withdrawals, is looking to address its current liquidity issues with the launch of a new token a digital unit designed with utility in mind, providing access and use of a larger crypto economic system. .
The Hong Kong-based platform revealed on June 23 that it was pausing all withdrawals due to the “ extreme market an area or arena, online or offline, in which commercial dealings are conducted. conditions”. and the uncertainty surrounding a given counterparty. The unidentified counterparty, which CoinFLEX stressed it was not the struggling crypto hedge fundThree Arrows Capital capital is most commonly defined as the large sum of money you would use to invest. nor any crypto-loan firm, had allegedly entered into a “valor negativo” al not being able to meet a debt of USD $ 47 million.
Now, the exchange has indicated plans to release a new token in order to raise funds in an attempt to restart withdrawals for their clients. All after the mystery client a client is software that can access and process blockchain transactions on a local computer. A common application of this is a cryptocurrency software wallet. was unable to pay the massive debt.
CoinFLEX finds a solution
In a blog entry published this Tuesday, CoinFLEX said it had found an innovative solution to its problem: tokenizing debt. The company announced the creation of a new digital digital technologies are these electronic tools that have the ability to generate, store or even process data. currency currency is a medium of exchange that defines value. worth USD $47 million that will offer an attractive annualized yield (APY) of 20% to its holders.
As a solution to re-enable withdrawals, CoinFLEX plans to monetize this personal guarantee by creating a corresponding liability in the form of a token called Recovery Value USD (rvUSD).
According to the technical paper which was quoted by Crypto Briefing , customer debt repayments from CoinFLEX would be converted to USDC, and rvUSD holders would be able to convert their tokens to USDC on a pro rata basis as new repayments are made. Available only to sophisticated investors outside the US, rvUSD will begin airing this week.
“ We have been talking to potential large buyers and believe there is significant interest in the terms presented. “said the CEO of CoinFLEX Mark Lamb, in the publication.
CoinFLEX explained that, under normal circumstances, it would automatically liquidate the insolvent positions but the merchant had a clause in his account an account is essentially a whose purpose is to track the financial activities of a specific asset/ that did not allow that to happen. The company declined to name the investor, but said the individual ” is a person of high integrity “with liquidity problems related to the recent downturn in the markets and that it has ” significant stakes in several privately held unicorn companies and a large portfolio a collection of cryptocurrencies or crypto assets held by an investment company, hedge fund, financial institution or individual. “.
Insolvency problems in the industry
By issuing the new rvUSD tokens, CoinFLEX hopes to raise enough money to cover the shortfall on its books left by the investor and resume withdrawals for users. Although it should be noted that the plan is held under the expectation that the investor is going to pay up, something that may not happen, as pointed out by CNBC .
In an interview for Bloomberg, the CEO of the platform expressed his confidence that the merchant will pay you to the company ” sometime in the future ”. Also, when asked about the possibility of a run on the banks, Lamb said he is not concerned about that scenario as clients can withdraw their funds once the new fundraising is complete from token .
Lamb también dijo que CoinFLEX plans to increase transparency for future positions, notional value of accounts, margin, and will use an external audit an audit is a process where developers inspect the underlying code and/or algorithm that compose systems and applications. firm to do so. The exchange expects to resume withdrawals on June 30, but is still subject to receiving funds pursuant to the rvUSD issuance.
The problems of CoinFLEX come amid a broader wave of insolvency difficulties for companies in the cryptocurrency industry, which appear to be suffering from the recent turbulence in the cryptocurrency market.
In early June, crypto-lender Celsius that now is considering filing for bankruptcy stopped withdrawals due to ” extreme market conditions “. A few days later, his similar Babel Finance also froze the withdrawals citing ” unusual liquidity how easily a cryptocurrency can be bought and sold without impacting the overall market price. pressures “. The announcements came amid reports of insolvency of the reputed crypto-fund Three Arrows Capital .
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Article by Hannah Estefania Perez / DiarioBitcoin
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