The crypto derivatives exchange and yield platform, CoinFLEX, is planning to raise funds by creating a token called Recovery Value USD (“rvUSD”) in response to a long-time customer going into negative equity of $47 million.
A CoinFLEX customer with a non-liquidation recourse account began experiencing temporary liquidity issues because of a credit crunch in markets.
In response, CoinFLEX had decided to pause user withdrawals.
The platform will begin issuing $47 million in “Recovery Value USD” tokens with a 20% yield.
Withdrawals will resume on June 30, depending on the level of demand for the new tokens; if the full amount of $47 million is raised, all CoinFLEX users will be able to withdraw their funds in full.
The company reiterated that no other accounts on CoinFLEX are in negative equity.
Mark Lamb, CEO of CoinFLEX wrote in the Telegram chat, “There’s other options being made available as well — we’re going to do everything possible to ensure that users’ funds are made whole and withdrawals enabled.”
It also announced that it will develop a new model of futures margin that will make the notional (USD) value of each account’s futures positions publicly available through an external auditing firm.
It will also make available the margin (collateral) backing these positions in USD value, as well as a breakdown of the collateral by type 1 (stablecoins), type 2 (highly liquid coins), and type 3 (low liquidity coins).
