Cryptocurrency Exchange CoinFLEX announced in its blog post today that it has started arbitration proceedings in Hong Kong to collect $84 million in losses from a client.
The company stopped withdrawals last month after CoinFLEX CEO Mark Lamb said investor Roger Ver defaulted on a loan contract worth $47 million in USDC.
Lamb said on Twitter at the time that the contract required Ver to “guarantee any negative equity” and that he had been given a notice of default.
In response, Ver wrote on Twitter that rumors of him defaulting on a loan were false.
According to CoinFlex’s statement, the slippage cost of liquidating counterparties’ collateral was higher than expected.
CoinFLEX Claims Roger Ver Injured Themselves $84M
Lamb and Sudhu Arumugam, co-founders of CoinFLEX, said in today’s blog post that after the collateral was liquidated, “there is still a significant shortfall of around US$84 million, so they are taking action to reclaim this debt.”
“The original estimate of $47 million that we communicated did not include the substantial loss in liquidating key FLEX coin positions,” the post said, without mentioning the client.
The following statements were included in the continuation of the blog post:
“This person first asked us to liquidate his account, but then continued to tell us for a significant period that he wanted to send large sums of funds to the exchange to physically take over his futures positions. Right now, we understand that this person kept us busy and hoped for an uptrend in the market that never happened.”
The two executives also reported that a 12-month process is required in Hong Kong for a sanction decision that could be applied to the client’s worldwide assets.
Meanwhile, the article stated that the company is trying to raise capital from new investors and eventually continue with withdrawals, and it is stated that the company aims to make 10% of its customers’ balances ready to withdraw money within a week.
*Not investment advice.