Coinflex Starts Legal Proceedings Against Troublesome Customer Owing $84 Million
- CoinFlex also said it is in discussion with some of its biggest clients, and hopes to convince them to convert part of their deposits into equities.
Crypto trading firm, CoinFlex, has taken its first step towards a broad revival of the company. The company started a legal action to recover a debt of more than $84 million loss from one of its biggest customers.
A CoinFlex post on July 9 stated that the court filing had been made at the Hong Kong international arbitration center.
The post pointed out that the person is mandated under the company’s law to pay for the loss. However, the fellow has refused all appeals to pay the company. Thus, CoinFlex has no choice but to seek legal means of recovering the money.
Additionally, the post pointed out that the individual is “personally liable” to pay this amount. Hence, CoinFlex’s lawyers believe that the company can use the legal route to collect their money. CoinFlex paused withdrawals a few weeks ago after the account of one of its customers plunged into a deficit due to the market’s massive price swings.
Thus, having a negative impact on balances. CoinFlex CEO, Mark Lamb, disclosed that the famous bitcoin investor, Roger Ver, was the identity of the person mentioned in the post. However, Ver took to Twitter to deny the allegations. He even claimed that it was CoinFlex that owed him some money. On Saturday, part of CoinFlex’s post stated that the company owns more than 26 million FLEX tokens.
Based on the current conversion rates, the FLEX tokens are worth more than $7 million. However, the crypto trading platform announced that it won’t resume trading activities now. It explained that if it resumes trades, there would be massive price swings in FLEX’s prices. Consequently, its platform users’ collateral positions would be adversely affected.
CoinFlex Forges the Best Route Possible
CoinFlex further said it plans to generate funds in two ways. Venture capitalists then customers that are willing to swap their deposits for equity. The crypto firm also noted that many of its customers with massive deposits had shown interest in helping the company.
Hence, all parties will find the best solution moving forward. But, CoinFlex noted that the recovery of the $84 million debt could help protect FLEX prices from suffering a huge price swing. Last month, CoinFlex publicly disclosed that its earnings for the previous quarter were in the negative.
Coingecko data showed that FLEX’s price dropped to $1.60 from $4.20 following the announcement. Apart from declaring losses last month, the company didn’t reveal any recovery plans. Hence, its native tokens declined further in value. It has now lost 94 percent of its value in the last month.
Nevertheless, CoinFlex added that it plans to enable customers to withdraw 10 percent of their balances within the next seven days. It also predicted that the court might not reach a verdict on these legal proceedings till the third quarter of next year. However, the CoinFlex post stated that the company wouldn’t mind waiting that long provided the court rules in its favor.