As promised by CEO Mark Lamb on Monday, crypto derivatives exchange Coinflex is unlikely to restore withdrawal services on its platform on Thursday. Speaking to CNBC, Lamb clarified that the company needs more time to recover from the liquidity crisis triggered by negative equity of $47 million from a client – Roger Ver.
“We will need more time. And it is unlikely that evacuation will be enabled again tomorrow,” a report in CNBC quoted Lamb as saying.
On 23 June, CoinFlex halted withdrawals and FLEX Coin trading, citing extreme market conditions and uncertainty surrounding counterparty. Lamb mentioned in a blog the estimated date for resumption of evacuation was June 30.
Recovery Value Token – rvUSD
In an update on June 27, Lamb detailed the issues the exchange was facing and the steps being taken to address them.
Without naming anyone, he said a long-term client’s account went into negative equity, forcing the exchange to halt withdrawals. Since the individual had a non-liquidation recourse account, the company could not automatically liquidate the position.
“As a solution towards re-enabling withdrawals, CoinFLEX plans to monetize this personal guarantee by creating an associated liability in the form of a token called Recovery Value USD (“rvUSD”), they announced.
Lamb-Roger Ver Twitter Spat
Up to this stage, the size of the negative equity or the person to whom it was owed was not known. On June 28, a brawl broke out on Twitter between the CEO of CoinFlex and the counterparty – Roger Ver.
Its beginning a. resulted from Tweet To Ver who said, “There have been some rumors circulating lately that I have defaulted on a loan to a counterparty. These rumors are false. Not only does this counterparty owe me no debt, but this counterparty has owed me a debt.” A huge amount is due, and I am currently seeking a refund of my money.
The Coinflex CEO returned with a series of tweets in which he elaborated that his exchange had a written contract with Roger Ver, and that it has notified him of default.
“Roger Ver owes CoinFLEX $47 million USDC. We have a written contract with him that obliges him to guarantee any negative equity on his CoinFLEX account and a regular top up margin. is making a default and we have given notice of omission,” one of the Lambs Tweets Told.
Fund raising focus
In an interview with CNBC, Lamb clarified that his focus is now on raising funds and resuming withdrawals.
“The good news is the number of players interested in this loan offering and this token offering are very well capitalized,” Lamb said.
The new recovery stablecoin rvUSD is available to high-income and high-net-worth investors in non-US jurisdictions, and promises a 20% interest rate.
Expressing confidence that a recovery is on the way, Lamb said that CoinFlex will take advantage of “the recovery of funds from Ver and a financing fee levied on it” to pay interest on RVUSD.
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