CoinFLEX cryptocurrency derivatives platform will launch the Recovery Value USD (rvUSD) token. With its help, the company expects to pay off the debt of a “wealthy” private client and resume the withdrawal of user funds.
Hi everyone, we’re sharing our latest update on plans for re-enabling withdrawals on the platform 👇https://t.co/34brwoDYuL
— CoinFLEX (@CoinFLEXdotcom) June 27, 2022
“rvUSD is a token, released by Liquidity Technologies Ltd. (“CoinFLEX”). It is related to the outstanding debt of a certain high net worth individual to CoinFLEX, ”says a white paper published by the company.
On June 24, the platform suspended the withdrawal of user funds due to “extreme market conditions” and “counterparty uncertainty”. Then the head of the company, Mark Lamb, emphasized that the latter is not a Three Arrows Capital (3AC) hedge fund or “any loan firm.”
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On June 27, Lamb said the company was having trouble because of a “longtime” client who was given a loan on unique terms. There is no liquidation price for his position – in return, he provides liquidity to the platform. However, against the background of the crisis, his position became unprofitable.
“We want to emphasize that this person is a highly intelligent person with significant funds, experiencing temporary liquidity problems due to for the credit (and price) crisis in the cryptocurrency and traditional markets. This person has significant stakes in several private unicorns and a large portfolio of securities,” wrote Lamb.
By issuing rvUSD, the platform intends to cover the client's debt obligations and resume the withdrawal of funds. The company will issue 47 million tokens at a price of 1 USDC.
Experienced investors, with the exception of US residents, can participate in the token sale. Applicants must have an annual income of at least $200,000 and a net worth of $1 million.
The minimum subscription amount will be 100,000 USDC.
In order to attract participants to the token sale, the platform has set an annual rate yield on the instrument at the level of 20%. The CoinFLEX Treasury has also allocated 2.5M FLEX (~$2.67M at the exchange rate at the time of writing) — the coins will be distributed to rvUSD holders after the “whale” debt is paid off.
The company plans to resume withdrawals on June 30 .
Recall that cryptocurrency broker Voyager Digital has sent a notice of default to 3AC hedge fund due to non-payment of a loan.
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