CoinFLEX plans new token to raise funds days after halting withdrawals

Crypto lender CoinFLEX announced plans on Monday to issue a new yield bearing token, just four days after halting withdrawals. 

CoinFLEX revealed on June 23 that it was pausing all withdrawals due to “extreme market conditions and continued uncertainty involving a counterparty.” The business clarified that the counterparty was not the under-fire crypto hedge fund Three Arrows Capital. 

In order to restart withdrawals on its platform, CoinFLEX plans to raise funds by issuing a new token that promises a 20% annual return. The token will be named Recovery Value USD (rvUSD).

The firm will begin issuing $47 million worth of tokens on Tuesday and, depending on sales, hopes to restart withdrawals from June 30. The token will only be available to “non-US resident sophisticated investors,” according to the whitepaper.

High yield tokens have come under persistent scrutiny over the past few months following the collapse of Terra’s blockchain ecosystem, home to the Anchor protocol that offered investors upwards of 20% yield annually before collapsing. 

CoinFLEX was founded in 2019 as a platform for physically-delivered futures, it has since pivoted its focus to build a repo market for crypto.