CoinFLEX describes a plan to return $84 million by raising new capital
The company hopes to raise capital from new investors and resume withdrawals by customers. CoinFLEX estimates that it will take about 12 months for it to obtain a judgment in Hong Kong that can be enforced against the assets of its clients around the world.
Cryptocurrency exchange CoinFLEX has launched arbitration proceedings in Hong Kong to recover $84 million in damages from a client, according to a blog post today.
Last month, the company suspended withdrawals after the CEO of CoinFLEXMark Lamb stated that the investorRoger Ver has not fulfilled its obligations under the loan agreement in the amount of 47 million US dollars. At the time, Lamb said on Twitter that the contract required Ver to "guarantee any negative equity" and that he had been served with a default notice.
In response, Ver tweeted that the rumors that he had not repaid the loan were false.
According to CoinFLEX, the deficit was larger than expected due to the associated costs of slippage in the liquidation of counterparty collateral, which was tied to the firm's poorly traded native token (FLEX).
CoinFLEX Co-FoundersLamb and Sudhu Arumugam stated in their blog that after the liquidation of the collateral, "there is still a significant deficit of about US$ 84 million, so we have begun actions to recover this debt." The initial "estimate of $47 million, which we reported, does not include significant losses in the liquidation of its significant positions in FLEX coins," the report says, without specifying the client's name.
"The person first asked us to liquidate his account, but then for a considerable time after that he continued to tell us that he wanted to send significant funds to the exchange to physically secure futures positions. Now it is clear to us that he was stalling in the hope of a rebound in the market, which never happened," the blog post says.
The CoinFLEX co-founders said in a statement that they estimate it will take about 12 months to get a judgment in Hong Kong, which can then be enforced against the client's assets around the world.
Meanwhile, the company is seeking to raise capital from new investors and eventually resume withdrawals, the report said, adding that CoinFLEX hopes to make 10% of its customers' balances available for withdrawal within a week.
In 2019, CoinFLEX became a platform for futures with physical delivery. In 2020, the company revised its strategy, focusing on creating a repo market for cryptocurrencies. Among the investors of the exchange are Polychain Capital and Digital Currency Group.
https://coin-signal.com/cryptonews/coinflex-describes-a-plan-to-return-84-million-by-raising-new-capital/
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