CoinFLEX Starts Arbitration Process to Recover $84 Million

To recoup $84 million in damages from a "big individual client" who allegedly failed to pay a debt that compelled the business to halt withdrawals across the whole platform, CoinFLEX has filed a lawsuit. CoinFLEX's CEO Mark Lamb claims that Roger Ver's loan default is what is to blame for the company's present problems.

As part of its efforts to recover from a liquidity issue that has prohibited customers from withdrawing cash for over three weeks, the business is also in discussions with a major US-based exchange/ATS platform. More precisely, CoinFLEX stopped withdrawals on June 23 due to the market's severe volatility.

Recovery Approach

Co-founders Sudhu Arumugam and Lamb said that the business had formally entered arbitration in Hong Kong. An arbitrator, not a judge in a court of law, will hear the parties' disagreement throughout the arbitration process as is the case with all contract-based binding dispute resolution procedures.

It's important to note that arbitration, which is referred to as an alternate conflict resolution method, is not the same as mediation or conciliation.

Both Arumugam and Lamb have expressed hope that the litigation might lead to a significant recovery, and CoinFLEX has said that it anticipates a decision in the arbitration case to take up to 12 months. The man is individually responsible for paying the whole sum, thus according to Arumugam, "Our attorneys are extremely sure that we can enforce the verdict against him."

Although the business hasn't specifically mentioned Ver by name, Lamb wrote on Twitter that the steadfast supporter of Bitcoin (BTC) had broken his contract and failed to supply the funds required to fulfill a margin call, which caused his account to go into negative equity.

The corporation had earlier said that the shortfall caused by Ver's losses was $47 million, but this initial estimate did not account for the substantial loss incurred when Ver's FLEX coin holdings were liquidated.

They claim that after selling off Ver's sizable investments, CoinFLEX's native cryptocurrency FLEX saw losses that were almost two times as large. Following the announcement of the withdrawal freeze on June 23, FLEX saw a drop of almost 66 percent. This indicates that in addition to implementing a platform-wide withdrawal freeze in response to Ver's purported failure, FLEX holdings were also sold off to offset the loss.

Since then, Ver has refuted the accusations and said that CoinFLEX owes him money.