Funds available soon as well
Currently, CoinFLEX is facing a liquidity crisis and has been facing it for three weeks. This crisis has prevented users from withdrawing funds from their accounts. Recently the co-founders decided to speak to their community about the situation and make a few announcements.
The co-founders Sudhu Arumugam and Mark Lamb have announced that to recover $84 million in losses, the company has entered arbitration in Hong Kong. This arbitration is against one “large individual customer” that has been claimed by CoinFLEX to be Roger Ver.- a prominent Bitcoin personality known as “Bitcoin Jesus”
The individual allegedly defaulted on a massive position and refused to honor a contract with CoinFlex. The contract had a stipulation for guaranteeing any negative equity on his personal account. It was this failure that caused the issues with CoinFlex and made it so other users were unable to properly have the ability to conduct transactions on the site. Late June saw platform-wide freezing of all withdrawals.
The co-founders spoke on the case and stated that the arbitration would not be quick, the expectation is that it may take a year to complete. The two co-founders remain positive and believe that the end result will be one of substantial recuperation stating that their lawyers believe it to be a case that they are confident in.
Ver was not mentioned directly in their announcement but Lamb made an outright direct accusation on his Twitter.
Shortly after this accusation, Ver went on Twitter to state his innocence and accuse the company of actually owing him a substantial amount.
The original amount claimed by the co-founders of CoinFLEX was $47 million but was later updated to $84 million. The duo stated that once Ver’s massive positions were liquidated the losses nearly doubled. The FLEX token crashed in value by 66% upon the news of the withdrawal freeze and the company has since had a hard time recovering. The default of Ver’s account damaged the company twice by forcing the withdrawal freeze and adding the large losses when the FLEX positions held by Ver were sold off.
CoinFLEX stated the two were in talks for weeks but Ver never followed through on his promises to correct the issues, it was because of this that the company decided to go into arbitration. The process will be a slow one as cases like this take time.
The arbitration was announced and so was the possibility of opening up some of the withdrawal channels. The company spoke about allowing users to withdraw 10% of their balance sometime next week. This means that the company will in turn need o sell all non-native assets that are also locked on the platform and turn them into USDC, this in turn means closing all trading and all futures positions. There was also talk of fundraising and conversations with “large” CoinFLEX customers about converting deposits into equity.