CoinFLEX to issue a new token in hopes of solving its liquidity problems

One of the projects which recently limited its user withdrawals due to extreme market conditions – CoinFLEX, a crypto lending platform, announced it will be issuing a Recovery Value USD (rvUSD) token, in hopes of addressing its liquidity problems. rvUSD is to be sold through a new $47 million token offering, to account for the $47 million loss the company put itself into by issuing a no-liquidation account to an unnamed whale on the condition that the account was to never go negative.

The whale account that has been at the center of the liquidity shortage experienced by CoinFLEX was described as being owned by a “high-integrity person of significant means”, according to CoinFLEX CEO Mark Lamb. It is also claimed that this was the only such account on the platform. Although the identity of the account holder in question is not revealed, it must be noted that the situation resembles the practices 3AC has been rumored to be involved in and occurred at around the same time 3AC liquidations were happening one after another.

The new token will be issued only to non-United States residents marked as “Sophisticated Investors” with a minimum subscription of $100,000 per investor, where each rvUSD is worth 1$. A sophisticated investor is one that has passed KYC, has a net worth of at least $1 million, and has an annual income of at least $200,000.

In an attempt to regain the clients’ trust, Mark Lamb announced in an interview with Bloomberg that his company will no longer issue accounts like the one that caused the problems, and will be publicizing the notional US dollar value of every account’s futures position through an external auditing firm.