The Crypto CoinFlex exchange is unlikely to resume withdrawals Thursday as it had originally hoped, according to CEO Mark Lamb, as the company continues to search for buyers for its $47 million bad debt.
Speaking to CNBC on Wednesday, Lamb said more time is needed before he can reopen the withdrawals platform, saying:
“We will need more time. It is unlikely that withdrawals will be re-enabled tomorrow.”
The cryptocurrency exchange was relying on a $47 million token offering that was launched on Tuesday, known as Recovery Value USD (rvUSD). The premium offering was created in an attempt to sell off his bad debt after one of his accounts went into negative equity.
In a statement on Tuesday, the company said that it hopes to resume withdrawals as previously scheduled on Thursday, but acknowledged that it will be subject to the issuance of the token for full subscription.
The company has not provided any updates on the number of tokens subscribed yet, but Lamb indicated on Wednesday that CoinFlex is in talks with several large funds to buy $47 million in debt.
In a separate interview with MarketWatch, Lamb said it was making “significant progress” in its token sale among distressed debt funds, existing clients and investors, adding that tens of millions of dollars had emerged in “concessional commitments.”
On Thursday, June 30, CoinFlex confirmed in a statement that withdrawals are still pending.
“We continue to speak with investors interested in rvUSD and commitments are increasing. Once we are fully committed to selling the token, we will be able to communicate a clear path toward enabling withdrawals, but until then it will remain on hold.”
“You’ll hear from us as soon as updates are available. The goal is to do everything we can to avoid haircuts for clients’ money, and we remain confident we can make it happen. Rest assured, we’re working around the clock.”
The crypto investment platform halted user withdrawals on June 23, citing “harsh market conditions” and “uncertainty over a specific counterparty,” which was later revealed as the result of a long-term client of a CoinFlex account entering negative equity.
Days later, CoinFlex CEO Mark Lamb publicly referred to “Bitcoin Jesus” Roger Ver on Twitter, claiming that Ver owed the company $47 million after allowing his account to go into passive capital.
RELATED: Roger Ver denies CoinFLEX CEO claims he owes the company $47 million
On the same day, Ver – without mentioning CoinFlex by name – denied rumors that it had “defaulted on a debt to a counterparty”, instead claiming that the crypto company owed him a “large amount of money”. Ver was an early investor in the stock exchange and had favorable borrowing terms.
Lamb continued the feud on Twitter, saying, “The debt is tied to his account 100%,” adding that his company “categorically denies that we have any debt owed to him.”
CoinFlex’s recent woes are just another example of a growing number of crypto investment firms and trading platforms facing liquidity issues amid a crypto bear market.
Crypto-lending platform Celsius Network is staring at a possible bankruptcy, while crypto hedge fund Three Arrows Capital has received a default notice from Voyager Digital. A court in the British Virgin Islands has reportedly ordered her liquidation.
Update: Added the June 30 announcement from CoinFlex confirming that withdrawals are still pending.