The crypto derivatives trading platform that halted withdrawals last week will issue the tokens that can be swapped into USDC or its own coin.
See related article: Crypto winter ushers in account freezes as platforms feel the chill
Fast facts
- CoinFLEX is issuing “rvUSD” tokens towards an outstanding debt owed by an unnamed high-net-worth individual, the exchange said.
- Under an agreement with the exchange, the longtime customer has personally guaranteed to make up for any shortfall in his account to avoid being liquidated in a market downturn.
- The individual is a “high integrity person of significant means” with “significant shareholdings” in several unicorn private companies and a large portfolio, CoinFLEX said. The individual is “experiencing temporary liquidity issues due to a credit and price crunch in markets,” it added.
- Investors will be able to swap their tokens into USD Coin (USDC) on a one-on-one basis. If the repayment takes more than 15 months, they can opt to convert their tokens into a mixture of USDC and FLEX Coins or wait for full repayment in USDC.
- Token holders will be paid an annual interest of 20% in rvUSD daily, CoinFLEX said.
- If the individual defaults, CoinFLEX will pay back token holders out of its balance sheet, with 2.5 million units of FLEX Coins being set aside for this issuance.
- CoinFLEX had halted withdrawals due to extreme market conditions and uncertainty involving a counterparty.
See related article: Contagion risk from Three Arrows Capital weighs on Bitcoin, crypto
CoinFLEX is a sponsor of Forkast.
