Centrifuge Considers 1:1 Stock Conversion Plan for CFG Holders

Centrifuge is exploring a plan that would allow CFG holders to convert their tokens into company shares. The proposal, titled "Review of Token-Equity Conversion for Maximizing Long-Term Value of CFG," was made public on the 17th and includes a plan to re-register the Centrifuge Network Foundation as an exempt company in the Cayman Islands, which can issue shares. The conversion ratio is set at one share for every 1 CFG, and holders of more than 100,000 CFG will be listed on the shareholder register, while those holding less can participate through a trust structure designed by CoinList. The conversion is optional, and holders who do not participate can continue to hold their CFG or sell it on the open market. The proposal states that the public token structure has increased burdens regarding institutional participation and regulatory exposure. The conditions for conversion will be determined after board approval, governance voting, and finalization of the legal structure, with the start date and duration yet to be decided. This proposal comes after Centrifuge changed its governance structure. Community reactions are mixed, with supporters claiming it enhances alignment with traditional financial institutions, while opponents express concerns over liquidity reduction and issues related to KYC and taxation. Regulatory issues remain, and the proposal states that feedback will be accepted for 14 days.

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