Embattled crypto derivatives exchange CoinFLEX is announcing employee layoffs amid a 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.
“We, unfortunately, had to let go of a significant number of the CoinFLEX team across all departments and geographies. The staff cuts and non-staff costs that we have made will reduce our cost base by approximately 50-60%. The majority of the team that remain are focused on product and technology, which remains the core of our business.
We will monitor costs to ensure we operate as efficiently as possible and scale as volumes come back. The intention is to remain right-sized for any entity considering a potential acquisition of or partnership opportunity with CoinFLEX.”
CoinFLEX says it’s experiencing financial troubles because one customer, known as ‘Bitcoin Jesus’ for his early advocacy of the king crypto, failed to pay back a substantial debt.
The crypto firm says it’s currently in arbitration with the customer in Hong Kong to potentially recover funds after they couldn’t liquidate his positions.
“We tried to liquidate his account in a prudent manner using counterparts on the exchange but as the positions were so significant, they involved slippage as any large or series of large orders would reasonably create.
Throughout the process, we kept the individual fully informed and he had cooperated with us and promised to pay or increase collateral to cover the shortfall but at the end, the promise proved empty.
We have commenced arbitration in HKIAC [Hong Kong International Arbitration Centre] for the recovery of this $84 million 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.”
“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.”
However, Ver is denying the allegations and instead says that CoinFLEX owes him money.
“Recently some rumors have been spreading that I have defaulted on a debt to a counter-party. These rumors are false. Not only do I not have a debt to this counter-party, but this counter-party owes me a substantial sum of money, and I am currently seeking the return of my funds.”
In June, CoinFLEX halted customer withdrawals, citing market volatility and the debt owed to them as reasons why.
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Anton Chernigovskii/Andy Chipus