CoinCodeCap's Weekly Issue 13
CoinCodeCap Weekly brings you an entire week’s market updates and news in one article. Got no time to stay updated during weekdays? No worries, we got your covered!
Will CoinFLEX's Plan Of Locked Funds Be Sustainable?
Cryptocurrency exchange CoinFLEX is facing a huge crisis as one of its users, Roger Ver owes them $47 million. However, further investigation reveals that the investor holds the Flex coin of the exchange in collateral. Therefore, the total amount that Roger owes to CoinFLEX is $84 million.
The exchange soon closed withdrawals as it does not hold enough funds for its customers. Soon, the FlexUSD depegged and is currently trading at $0.33. The closing of withdrawals was a wrong decision on the exchange's part. They were unable to figure out the exact amount of money they owe to the public as there are possibilities of several other accounts that have lost their collateral, like Roger Ver.
To understand the current financial situation of the exchange, CoinFLEX has started withdrawals. However, the twist here is the customers will have access to only 10% of their total funds. The dollarised value of the remaining 90% will be visible to them, but they will not liquidate it. This amount is known as the 'Locked Fund' at CoinFLEX.
But, what will the exchange gain by implementing this strategy?
First, CoinFLEX can use the funds to get more loans from investors to save the company from dissolving.
Second, the exchange will now have an idea of the actual fund it holds.
Our next question is, Is this plan sustainable?
According to us, No! There are a couple of reasons, why:
The exchange will eventually start losing the support of its customers.
Their customers will lose money.
CoinFLEX, which is already at a loss, will start losing more.
However, we are unsure how the exchange, CoinFLEX is planning to implement the strategy of 'Locked Funds' and what are the actual benefits of the same.
The Happenings
Binance Celebrates 5th Anniversary with Zero Bitcoin Trading Fees [LINK]
Solana Ecosystem Executives accused of Profiteering from Illegal Sale of SOL Securities [LINK]
Reddit is Launching a new NFT Avatar Marketplace [LINK]
Colombia releases a guide for Blockchain Integration in Public Projects [LINK]
Gloria Zhao becomes the First Woman to hold Bitcoin Core [LINK]
Financial Stability Board to Introduce Robust Regulation and Supervision of Cryptocurrencies [LINK]
Bitcoin Miners Turn off Rigs as the Texas Power Grid Deteriorates [LINK]
Charts And Dips
ZEC Price Analysis July 2022 [LINK]
The information above does not constitute investment advice, and the author does not ask you to either buy or sell any of the assets mentioned in the article.