The cryptocurrency investor promised to provide funds to take over the futures contracts but left CoinFLEX with a shortfall of USD 84 million. The crash that wiped out about USD 2 trillion from the cryptocurrency market capitalization affected CoinFLEX.
Cryptocurrency investor Roger Ver will have to face legal action from the derivatives exchange CoinFlex. He failed to pay a USD 47 million margin call on a leveraged position secured by the FLEX coin.
Ver was among the first cryptocurrency investors and Bitcoin (BTC) promoters since 2011, but the collateral for his leveraged position dropped below the minimum threshold. That happened after the collapse of the TerraUSD stablecoin put leading cryptocurrencies under pressure.
In June, CoinFLEX announced that it would stop trading FLEX coins on perpetual and spot exchanges because a customer owed them USD 47 million.
Mark Lamb, the CEO of the derivatives exchange, stated that the counterparty was not Singapore hedge fund Three Arrows Capital. He also said it was not a lending company, excluding lenders BlockFi and Celsius, but a cryptocurrency Roger Ver.
Following Liquidation, CoinFLEX Has USD 84 Million of Their Own
Since Ver was a manual margin client, he suffered automatic liquidation when his leverage ratio dropped below the minimum threshold. However, the derivatives exchange guaranteed him a grace period to add more collateral.
The cryptocurrency investor had asked them to liquidate his position, promising to provide funds to take over the futures contracts. However, he left CoinFLEX with a shortfall of USD 84 million even though they liquidated his position.
CoinFLEX is issuing a lawsuit against Roger Ver, who has refused to pay the USD 84 million. Their attorneys believe they have a valid argument and expect the litigation process to last around 12 months.
Roger Ver denied defaulting on debt to CoinFLEX, alleging the firm owed him a lot of money. However, it is time before the law determines whether that is true.
What Will CoinFLEX Do Next?
The crash that wiped out about USD 2 trillion from the cryptocurrency market capitalization affected CoinFLEX. Amid that situation, Celsius, Voyager Digital and Three Arrows Capital remained struggling to stay afloat but filed for bankruptcy afterward.
CoinFLEX is talking with a leading US stock exchange about a potential partnership to finalize as soon as they secure funding. The deal would allow the latter to leverage the platform of CoinFLEX to offer access to US equity repo markets using an overseas license.
The derivatives exchange from Hong Kong engaged large depositors seeking to convert their deposits into shares. However, they are unlocking cash for 10% of withdrawal balances, along with caveats.
The collapse of the overall cryptocurrency market has affected the trading volume of exchanges. The fear caused by that situation has led many investors to leave as they do not want to lose their money. However, some analysts consider this is the best time to buy crypto assets as a long-term store of value.
By Alexander Salazar
