Crypto Derivatives Struggle CoinFLEX Announces Layoffs Amid Legal Battle With ‘Bitcoin Jesus.’
In a new blog post, CoinFLEX says it is laying off a significant number of employees across the board as a means of reducing overhead costs.
“Unfortunately, we had to let go a significant number of the CoinFLEX team across all departments and geographies. The staff cuts and non-personnel costs we have made will reduce our cost base by approximately 50-60%. The majority of the team that remains is focused on product and technology, which is still the core of our business.
We will monitor costs to ensure we are operating as efficiently as possible and scale as volumes return. The intention is to remain the right size for any entity considering a potential acquisition or partnership opportunity with CoinFLEX.
CoinFLEX says it is experiencing financial problems because a customer, known as “Bitcoin Jesus” for his early advocacy of the royal crypt, failed to repay a significant debt.
The crypto firm says it is currently in arbitration with the customer in Hong Kong to potentially recover funds after they were unable to liquidate his positions.
“We tried to liquidate his account in a prudent manner using counterparties on the exchange, but since the positions were so significant, they involved slippage that any large or series of large orders would reasonably create.
Throughout the process we kept the person fully informed and he had cooperated with us and promised to pay or increase the security to cover the shortfall, but in the end the promise proved empty.
We have started arbitration in the HKIAC [Hong Kong International Arbitration Centre] for repayment of this $84 million as the person 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 that the individual is personally responsible for paying the total amount, so our lawyers are very confident that we can enforce the judgment against him.”
According to CoinFLEX CEO Mark Lamb, Roger Ver, otherwise known as Bitcoin Jesus, owes crypto futures exchange $47 million in stablecoin USD Coin (USDC) alone.
“Roger Ver Owes CoinFLEX $47 Million USDC. We have a written contract with him that commits him to personally guarantee any negative equity in his CoinFLEX account and replenish margin regularly. He has been in default of this agreement and we have issued a notice of default.”
However, Ver denying the claims and instead says CoinFLEX owes him money.
“Recently, rumors have spread that I have defaulted on a debt to a counterparty. These rumors are false. Not only do I not owe this counterparty, but this counterparty owes me a substantial sum of money and I am currently seeking to recover my money.”
In June, CoinFLEX halted customer withdrawals, citing market volatility and their debt as reasons.
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