Withdrawals from CoinFLEX are now partially operating again, giving rise to cautious hope that the company was gradually overcoming liquidity problems brought on by a high-profile client default.
All CoinFLEX customers will be able to withdraw up to 10% of their assets starting at 5 am UTC on Friday, according to the firm.
Reopening of CoinFLEx withdrawals raises hopes
The cryptocurrency exchange says that all current withdrawal requests would be reversed and returned to their respective accounts, allowing customers to submit new requests up to the 10% cap.
The remaining 90% of user balances shall be deemed “locked funds,” or funds that are reflected on a user’s balance but which may not be withdrawn, traded, or pledged as collateral.
The new guidelines apply to all assets with the exception of flexUSD, an interest-bearing stablecoin that “cannot be withdrawn until further notice,” according to the business.
Recovering losses
On June 23, CoinFLEX suspended withdrawals after a counterparty allegedly failed to satisfy a $47 million margin call. Roger Ver, a cryptocurrency entrepreneur and proponent of Bitcoin Cash (BCH), was later identified as the counterparty, though he denied owing the firm any 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.— Roger Ver (@rogerkver) June 28, 2022
Later calculations revealed that CoinFLEX’s shortfall could have been as much as $84 million; this was the amount the business intended to recover through arbitration in Hong Kong it’s country of origin.
The collapse of the Terra (LUNA) ecosystem, which is now known as Terra Classic (LUNC), which caused extremely high volatility and contagion throughout the sector, has had a significant impact on the cryptocurrency market and has caused the bear market of 2022.
Following the collapse of asset prices, well-known companies such as Three Arrows Capital, Voyager Digital, and currently Celsius have declared bankruptcy.