CoinFLEX Reports $84M Deficit, Initiates Legal Actions
Cryptocurrency exchange CoinFLEX, which recently suspended withdrawals, citing «extreme market conditions,» said in a new update that it has a «significant deficit of about $84 million.» The exchange added that the incident occurred after its «large individual customer» violated terms of a written manual margin arrangement.
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CoinFLEX says the customer first tried to liquidate his account, but then was trying to convince the exchange that he wanted to send significant funds to take physical delivery of the futures positions.
«It is clear to us now that he was wasting time and hoping for a bounce in the market that never materialized,» CoinFLEX said.
CoinFLEX didn’t name the customer directly, but emphasized that the exchange has started arbitration in Hong Kong International Arbitration Centre for the recovery of the debt:
«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.»
CoinFLEX Pauses Withdrawals Due to ‘Extreme Market Conditions’
The move comes a few weeks after CoinFLEX CEO, Mark Lamb, said in a tweet that the long-time proponent of the Bitcoin Cash ecosystem, Roger Ver, is owing CoinFLEX just as little as $47 million in USDC shortly after Ver said that a «counter-party» owes him a «substantial sum of money.»
In the update, CoinFLEX noted that the first estimate of $47 million did not include the «significant loss in liquidating significant FLEX coin positions» made by the customer.
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