CoinFlex Begins Arbitration Against $84M Delinquent Customer; Focus on FLEX carriers
Crypto trading firm CoinFlex has commenced arbitration for the collection of more than $84 million in debt owed by a “large individual client” as part of a broader stimulus strategy.
“We have started arbitration in HKIAC [Hong Kong International Arbitration Centre] for the recovery of that $84 million as the individual had a legal obligation under the agreement to pay and refused to do so,” CoinFlex said in a post on Saturday. “His liability to pay is a personal liability, which means the individual is personally responsible for paying the full amount, so our lawyers are very confident that we can enforce the award against him.”
CoinFlex suspended withdrawals last month after a certain individual’s account went negative during June’s market volatility, affecting his balances. The individual was revealed by CoinFlex CEO Mark Lab to be prominent crypto investor Roger Ver, a claim that Ver refuse on social networks.
In Saturday’s post, CoinFlex said it had over 26 million FLEX tokens – valued at over $7 million at current rates – in its inventory. He added that the resumption of trading would cause market volatility in FLEX prices, which would inadvertently affect the collateral positions of platform users.
The company added that it was looking to raise a significant amount of funds from investors, including using customer deposits in exchange for equity. “There are a number of investors in this group of large depositors who have indicated that they may be able to help the company move forward if we can all find a workable solution,” said the society.
However, collecting these $84 million in outstanding debt could help cushion FLEX’s prices and prevent a sharp drop, CoinFlex said: “We believe that collecting the debt will help build confidence and solidify the trading price of FLEX Coin.
FLEX fell from $4.20 to $1.60 in late June as CoinFlex went public with its losses, according to data from CoinGecko. The lack of a quick recovery plan further contributed to the losses, with the tokens now down 94% in the past 30 days.
Meanwhile, CoinFlex said it hopes to make 10% of customer balances available for withdrawal next week, adding that the arbitration process could “take up to 12 months.”