CoinFlex takes legal action against customer over $84 million loss

Crypto exchange CoinFlex, which recently paused customer withdrawals amid liquidity stress, and revelations that crypto investor Roger Ver owed $47 million in failed repayments, has instituted legal action to recover even more from the pioneer crypto investor.

According to an update the crypto exchange published over the weekend, the same account that had the $47 million in counterparty losses, has now been readjusted. The customer now owes $84 million.

Roger Ver owes CoinFLEX $47 Million USDC. We have a written contract with him obligating him to personally guarantee any negative equity on his CoinFLEX account and top up margin regularly. He has been in default of this agreement and we have served a notice of default.

— Mark Lamb 💪 (@MarkDavidLamb) June 28, 2022

“The first estimate of $47m which we communicated did not include the significant loss in liquidating his significant FLEX coin positions. Now that we have found a bid for that size, the liquidations have created a final deficit of $84m for the account,” CoinFlex co-founders Sudhu Arumugam and Mark Lamb said in the blog post. 

Customer is “personally liable to pay”

CoinFlex said that its commencement of an adjudication process in Hong Kong is in a bid to recover the money from the “individual” – initially identified as Bitcoin Cash (BCH) promoter Roger Ver.

“We have commenced arbitration in HKIAC for the recovery of this $84m as the individual had a legal obligation under the agreement to pay and has refused to do so. His liability to pay is a personal liability which means the individual is personally liable to pay the total amount, so our lawyers are very confident that we can enforce the award against him,” the co-founders added.

The crypto exchange expects a favorable decision, though it notes the legal proceedings could take up to 12 months.

Meanwhile, the crypto platform has plans to resume customer withdrawals, with eyes on external funding via stablecoin USDC. 

The exchange is also in talks with a large US-based exchange over plans for a joint venture meant to keep CoinFlex in business.