However, CoinFlex wants to allow withdrawals from its platform with some limitations. Last month, CoinFlex halted its withdrawals after a large investor failed to pay $47 million in a margin call. In discussions with creditors, investors and others, Coinflex is planning to create some temporary liquidity for its depositors. On Saturday, crypto exchange co-founders Sudhu Arumugam and Mark Lamb announced a “Locked Funds Plan” for withdrawals.
In their joint statement today, Sudhu and Mark said, “The ongoing discussions with existing creditors, new investors and others will take several weeks and so we wanted to come up with a plan to create some temporary liquidity. coinflex depositor.”
“We would like to make available 10% of the balance available for withdrawal (and later on),” he said.
Here’s what a locked fund plan would be:
According to the founders of Coinflex, although you will see them as funds locked in your balance, they will not be available for withdrawal nor will they be counted as collateral. He said, “On the date, when we implement this plan, we will temporarily stop trading and close all long and short futures positions against each other. Thereafter, after further verification, we will be ready to trade. Will open again.”
Furthermore, since the outcome of the recovery plan is still uncertain and as to whether we need to raise or recover funds at USDC, Sudhu and Mark said, “we will also likely (subject to receiving appropriate legal advice on this) all The closure is required to sell assets, except Flex and FlexUSD, in USDC. Since the funds we wish to recover are in USDC, we need to dollarize the liability to confirm the total amount of liabilities. This will allow us to clearly determine the exact amount of obligations/liabilities for each user.”
He gave an example. For example, Bob had 1 BTC, 10 BCH and 10,000 USDC in his account, with BTC worth $20,000 and BCH at $100. After that, Bob’s withdrawable/available balance will become 0.1 BTC, 1 BCH, 1,000 USDC and a locked balance of 27,900 USDC.
“If we don’t sell the coins while BTC has risen from $20,000 to $100,000, we will have to recover 0.9 BTC to Bob, which is worth $90,000, while the USDC loan we recover is the required BTC. might not be able to cover up,” he explained.
The founders stated that implementing all of the above requires significant technology, operational and legal work. He expects that the implementation of the plan will take a week.
“We will also calculate all balance adjustments during the week and publish our balance sheet once they are done. Once this is fully verified and the first withdrawal process is successfully implemented, we will allow immediate withdrawals. Will consider providing additional balance amount for Rs.
He concluded, “There are many moving pieces to the plan and they are subject to change as we learn more.”
Coinflex plans to recover $84 million through legal proceedings against this person. The founders expect the mediation process to take at least 12 months to complete. In addition, Coinflex is planning a joint venture with a large US-based exchange/ATS platform.