CoinFLEX resumes withdrawals, but only 10% of user’s assets2 min read
CoinFLEX exchange has finally resumed withdrawals. But there is a catch: customers will only be able to withdraw up to 10% of the funds they have in their accounts.
In that sense, if someone has $10,000 stuck on CoinFLEX, the exchange will allow them to withdraw up to $1,000. The other $9,000 (90%) will remain blocked until further notice, which has no date yet.
The resumption of withdrawals took place exactly 20 days after the exchange was blocked, which occurred because of liquidity problems arising from a loan. According to the CEO of CoinFLEX, the exchange lent around $85 million to entrepreneur Roger Ver, but did not receive payment for the transaction.
According to the announcement, the 10% limit is a first step for the exchange to resume operations. Meanwhile, the CoinFLEX continues to work on recovery plans for its operations.
As of this Friday (15th), CoinFLEX will cancel all pending withdrawal requests and all funds will be returned to the respective accounts. Afterwards, users will be able to request the withdrawal of money again within the established limit.
During withdrawals reactivation, system access and cryptocurrency trading will be closed for a few hours.
All smartBCH deposits on CoinFLEX will have 90% of the deposit amount blocked. However, users can use the 10% amount on the platform and withdraw it as BCH.
In addition, FlexUSD, a stablecoin created by the exchange, will not be available for withdrawal, but will be redeemable on the platform. The company asked customers to deposit FlexUSD held on the platform as soon as possible.
“The remaining 90% of your balance will remain locked. Blocked funds will appear on your balance but will not be available for withdrawals, trades or counted as collateral on CoinFLEX,” the announcement said.
The cryptocurrency company suspended withdrawals last month after some accounts went into negative equity as a result of the cryptocurrency market crash.
CoinFLEX is currently working on an arbitration solution to recover $85 million in debt from Roger Ver. The well-known evangelist denies it and says that it is actually CoinFLEX that owes him money, a disagreement that took the matter to court.
Previous attempts to allow withdrawals
CoinFLEX had promised to restart withdrawals by June 30, five days after the suspension. However, CEO Mark Lamb delayed the plan as a result of disputes related to Roger Ver.
Instead of releasing the withdrawals, CoinFLEX launched a new token (rvUSD), which represents the amount the company would receive from Ver, promising 20% annual returns on it. But the market saw the act as a Ponzi scheme and did not buy into the idea.
Despite ongoing efforts to initiate withdrawals, the exchange has come under scrutiny after Three Arrows Capital (3AC) fund and exchange Voyager Digital filed for bankruptcy. Fears grew after lending platform Celsius Network also filed for bankruptcy.
Even so, the exchange has not declared insolvency and continues to seek to resume operations, giving at least hope to customers to recover some of the value they still have.