CoinFLEX Initiates Arbitration Proceedings in Hong Kong Against Roger Ver, who is Alleged to Owe the Platform $84M
- According to CoinFLEX, it has initiated arbitration proceedings against the “big individual customer” in Hong Kong.
- The shortfall was first pegged at $47 million, but this figure did not account for the large loss incurred when he liquidated his significant FLEX coin bets.
- The staff at CoinFLEX has disclosed that they have a $84 million deficit that they attribute to “a major individual customer” who was previously known as Roger Ver.
CoinFLEX has been working around the clock to find a solution that will allow the exchange to reopen. In the meantime, they have released an update apologizing for the situation and asking for patience from their user base.
The team is currently in talks with several potential investors, but nothing has been finalized yet. They are hopeful that a deal can be reached soon so that the exchange can get back up and running. In the meantime, they ask for users to remain patient and understand that these negotiations are delicate and take time.
The customer in question did not send additional collateral, and as a result, CoinFLEX incurred losses. The team goes on to say that they have been in talks with the customer in an attempt to reach a resolution, but at this time, no agreement has been made.
This $84 million loss is on top of the $3 million loss reported last week, bringing the total deficit to $87 million. While it is understandable that an individual customer would have some sort of arrangement like this in place, it does raise some questions about the internal controls at CoinFLEX.
What does that say about the overall risk management procedures if a single customer can put the exchange into such a precarious financial position? Surely, safeguards must be in place to prevent one individual from having so much control over the fate of the exchange.
It will be interesting to see how this situation plays out and what changes are made at CoinFLEX as a result. For now, it seems like they are committed to working with the customer to try and resolve the issue without resorting to drastic measures such as liquidation. Only time will tell if they are successful in this endeavor.
Roger Ver has already been identified as the individual. CoinFLEX’s CEO, Mark Lamb, identified the major individual customer as Roger Ver, often known as Bitcoin Jesus, in a June 2022 tweet.