Last week, CoinFLEX announced it was halting all withdrawals as well as trading due to crypto market volatility. At the time CoinFLEX stated that it did not hold counterparty risk with 3 Arrows Capital (3AC) or any lending firm. 3AC, a crypto hedge fund, has since defaulted on loan issued by Voyager Digital.
Today, CoinFLEX has announced that it is resuming withdrawals and “normal operations” adding that the recent market activity saw a customer’s account move into negative equity. The unnamed individual was said to be a long time customer who had a non-liquidation recourse account compelling the individual to pledge more assets.
CoinFLEX state that it is planning to monetize this personal guarantee by creating a corresponding liability in the form of a token called Recovery Value USD (“rvUSD”). CoinFLEX stated that the individual in question is a “high integrity” individual with “significant means” including shareholdings in several unicorns.
“We have been speaking to potential large buyers and believe there is significant interest in the terms presented. We are still targeting withdrawals for Thursday, June 30th 2022; however, this will be subject to receiving funds pursuant to the rvUSD issuance. If the rvUSD token issuance is fully subscribed, CoinFLEX will re-enable withdrawals and restore the platform to full functionality in an orderly manner. “
CoinFLEX stated that it will be “pioneering a new model of futures margining in direct response to this incident.” This will include an external audit firm attesting to positions.
CoinFLEX said it will be implementing the new model following the restoration of withdrawals.
Withdrawals are expected to commence on Thursday, June 30th, 2022.
CoinFLEX is a crypto trading and yield platform that topped $1 trillion in total trading volume at the beginning of 2022.
