Mark Lamb, CEO of CoinFlex, a cryptocurrency exchange, stated on Wednesday that CoinFlex may not be able to resume customer withdrawals as originally planned on Thursday.On the same day, Lamb stated in an interview with the media:We need more time
Mark Lamb, CEO of CoinFlex, a cryptocurrency exchange, stated on Wednesday that CoinFlex may not be able to resume customer withdrawals as originally planned on Thursday.
On the same day, Lamb stated in an interview with the media:We need more time. And it is unlikely to resume withdrawal tomorrow.
CoinFlex is the latest victim of the "Lehman crisis" in the cryptocurrency industry, with the cryptocurrency market losing billions of dollars in the recent "cryptocurrency winter". Bitcoin has plummeted by over 50% this year, down about 70% from its historical peak in November last year; Ethereum has plummeted by 70% this year, more than 75% from its peak last year.
On Thursday, Bitcoin once again fell below $19000, expanding its decline to 6.5% in the evening. Ethereum fell below $1000 per coin for the first time since June 19th, falling nearly 9% during the day.
CoinFlex: An investor is unable to pay additional margin
Last Friday, CoinFlex suspended customer withdrawals due to "extreme market conditions and ongoing uncertainty of counterparties". After similar actions taken by the cryptocurrency exchanges Celsius and Babel, the exchange became the third company this month to restrict customer withdrawals.
CoinFlex added that the problematic counterparty is not Sanjian Capital or other lending companies. Sanjian Capital is one of the largest hedge funds in the cryptocurrency market and has now fallen into bankruptcy liquidation.
CoinFlex stated that an individual investor owed the exchange approximately $47 million, which was partly due to its additional margin. At first, CoinFlex did not disclose the name of the investor.
Lamb revealed on Monday that the individual investor's account has become 'negative asset'. Normally, the company will automatically close the position of this investor. But this special investor has reached an agreement with CoinFlex not to allow this situation to occur.
CoinFlex stated that in return, the investor promised to "provide strict personal guarantees for account equity and margin requirements in exchange for not being liquidated".
In order to fill the $47 million gap on the balance sheet, CoinFlex stated in a white paper on Monday,We plan to issue a new token called RecoveryValue USD (rvUSD) with an annual return rate of 20%, hoping to raise $47 million. The financing activity is expected to last for four days and end this Friday.
Lamb stated that the ability to pay this rate of return will come from recovering funds from this individual investor and the "financing fees" charged to him.
The exchange stated in a blog article earlier this week that the company is working hard to resume user withdrawals on Thursday, provided it receives funding for the issuance of rvUSD.
This investor is known as Roger Ver, also known as "Bitcoin Jesus"
On Tuesday, Lamb claimed that the investor who failed to pay the exchange's $47 million worth of stable currency USDC was Roger Ver, one of the first investors in Bitcoin and jokingly referred to as the 'Bitcoin Jesus'.
Lamb said on Twitter:
He has a long list of records of margin calls and meeting margin requirements. To solve this problem, we often call him. We still hope to solve this problem
However, Ver denied on Twitter that he was the investor behind this debt. He said:
Not only did I not owe this counterparty a debt, but this counterparty also owes me a large amount of money, and I am currently pursuing debt
Lamb stated that this debt is "100% related" to Ver's account and stated that the company "denies any debt owed to Ver". Lamb said:
His statement is clearly incorrect. Unfortunately, RogerVer needs to adopt this strategy to evade his debts and responsibilities
For over a decade, Ver has been active in the cryptocurrency industry, investing in several companies and co founding Bitcoin. com and Blockchain. com.
The verbal battle between CoinFlex and Bitcoin Jesus is the latest dramatic event caused by the sharp drop in cryptocurrency prices in the past few weeks.
Lamb stated this week that Ver has received a default notice. He said that their goal is to continue negotiations with Ver and resolve the matter amicably, but there are also other legal avenues of recourse.
In addition, Lamb stated that the company is in negotiations with multiple funds that purchase non-performing corporate debt, which could potentially purchase all $47 million in debt.
He said, "The good news is that there is a very sufficient number of investors who have been contacted who are interested in this debt and token issuance." He added that some of the funds in contact have assets under management exceeding $10 billion.
According to CoinGecko's data,The transaction price of the CoinFlex native token FlexUSD on Wednesday was about $0.40, down 30% from 24 hours ago and 60% from 7 days ago.
This article is from Wall Street. Welcome to download the app to see more
Disclaimer: The content of this article is sourced from the internet. The copyright of the text, images, and other materials belongs to the original author. The platform reprints the materials for the purpose of conveying more information. The content of the article is for reference and learning only, and should not be used for commercial purposes. If it infringes on your legitimate rights and interests, please contact us promptly and we will handle it as soon as possible! We respect copyright and are committed to protecting it. Thank you for sharing.(Email:[email protected])
