CoinFlex goes to arbitration to recoup $84M loss
Crypto lender CoinFlex says it has begun arbitration proceedings in Hong Kong to recover $84 million in losses from a "single large customer" who defaulted on his positions last month.
Why it matters: After pausing withdrawals last month, CoinFlex still has a long way to go to shore up liquidity and make customers whole.
Details: CoinFlex previously estimated a loss of $47 million from the customer's positions in Flex, the company’s native token.
- However, due to the token's value crashing over the past month, those losses nearly doubled as it liquidated those positions.
The intrigue: In its latest update, the company declined to name the customer who defaulted, but CEO David Lamb had previously identified him as Bitcoin advocate Roger Ver.
- Ver denied those allegations, saying that a counter-party instead owed him a "substantial sum of money."
What's next: CoinFlex said arbitration could take 12 months to complete.
- In the meantime, the company says it is "looking to raise a significant amount of funds from investors" and speaking with large depositors about rolling some of their deposits into equity.
- In the coming week, the company hopes to make 10% of depositor balances available for withdrawal.