Crypto trading platform, CoinFLEX, has issued a statement after admitting a “lack of responsiveness in the last two weeks.” The two co-founders, Sudhu Arumugam and Mark Lamb, announced commencing arbitration at Hong Kong International Arbitration Centre (HKIAC) to recover the $84 million losses from a customer. The company claimed that the individual had a legal obligation under the agreement to pay but refused to do so.
CoinFLEX Vs. Bitcoin Jesus
The post does not mention the individual in question by name, but Lamb had previously outed that it was Bitcoin Cash proponent Roger Ver. Ver, on the other hand, refuted the allegations and instead lashed out at CoinFLEX, claiming that the investment platform owed him money.
In the latest update, the CoinFLEX co-founders stated that a judgment in the arbitration case would take up to 12 months. Still, they are optimistic about the outcome citing the liability in this case to be a personal one which gives the company a substantial edge.
“Our lawyers believe that we have a very strong case and have commenced legal actions to recover debts owed to us pursuant to this agreement… His liability to pay is a personal liability which means the individual is personally liable to pay the total amount, so our lawyers are very confident that we can enforce the award against him.”
Locked Funds Plan
CoinFlex suspended its withdrawals after Ver purportedly failed to pay $47 million in margin calls. Currently, it is in talks with creditors, investors, and others, to create some temporary liquidity for its depositors and is looking to enable some withdrawals from its platform via the “Locked Funds Plan.”
The company is considering making available 10% of balances for withdrawal. However, there are certain limitations. Users will be able to view them on their balances as locked funds, but they won’t be available for withdrawals, nor will they count as collateral. The day CoinFLEX implements this plan, it will temporarily halt trading and all long and short futures positions against each other. Only after verification will CoinFLEX re-open for trading.
Due to the uncertainty of the recovery plan, the founders stated that the company needs to raise or recover funds in USDC. For this, it will likely need to sell all the locked assets, except FLEX and flexUSD, into USDC.
” As the funds we are looking to recover are in USDC, we need to dollarize the obligation to confirm the total amount of the liabilities. This will allow us to clearly determine the exact amount of obligations/liabilities for each user.”