Crypto Exchange CoinFlex Seeks Restructuring, Cuts Staff, Costs up to 60%

CoinFLEX has announced its plans for restructuring in the wake of legal troubles, halted withdrawals and money losses, a company blog post said.

The company had to address a problem after an individual breached contract with the company. That case involved the company initiating a lawsuit to recover $84 million in losses from just one customer.

Longtime investor Roger Ver failed to pay back $47 million from a margin call, and the total rose after more things were calculated. The company’s plans might entail a joint venture with another crypto company to help the situation too.

“It may take some time before we can recover funds owed to us in the litigation actions we are taking against this individual,” the company wrote.

The company said there had been communications with Ver, who asked them to liquidate his account — but then “continued to tell us for some considerable time afterward that he wanted to send significant funds to the exchange to take physical delivery of the futures positions,” and it became clear he was wasting time to stall for a bounce in the market that didn’t happen.

The plans will see CoinFLEX issuing depositors rvUSD tokens, equity and locked FLEX coin. Depositors will get to approve the new structure and path for the company.

Locked balances markets will be created and tradeable as of next week, the company said.

The company said what happens next will involve working on making the exchange “more community-led” and make more opportunities to become a profitable business, through cutting costs and working with the CoinFLEX community to add more customers.

The company said it also wants to become a more attractive platform for new investors and joint venture partners.

There have been numerous issues happening with cryptocurrency as of late, including lending souring for investors as companies go bankrupt and freeze withdrawals.

Read more: Celsius Network Crash Leaves Customers Struggling Without Funds

News reports have quoted stunned clients who said they knew there would have been risks but that they had seemed worthwhile.

One such company that saw troubles was Celsius, which made the platform sound like a safe place to invest, with clients taking the company up and depositing crypto for high interest.

But then came the numerous losses, including bitcoin losing around 60% of its value since its record high last November. That made it so Celsius couldn’t cover its loans. Celsius reportedly owed $4.7 billion to users, a court filing said — with no clear way out yet for the company.

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