CoinFlex is set to sue Roger Ver, also called Bitcoin Jesus, for failing to pay a $47 million margin call for a leveraged position that was liquidated. The derivatives exchange suspended FLEX coin trading in perpetual swaps and spot trading last month.
Ver’s collateral for the leveraged position fell below the minimum threshold following the collapse of Terra’s stablecoin in mid-May. But he denied any involvement in the debt. Reports reveal that Ver asked CoinFlex to liquidate his position and promised to provide funds to take delivery of future contracts. However, he failed to uphold the promise. CoinFlex was left with no option but to liquidate its position. As such, the company was left with a deficit of $84 million.
CoinFlex, in a statement, said the individual (Ver) first asked the company to liquidate his account. He continued to ask for time to send the funds to the exchange to take physical delivery of the futures positions. CoinFlex said Ver, who had been waiting for a bounce in the market all alone, wasted the company’s time. The company tried to liquidate his account in a prudent manner using counterparts on the exchange. But the positions were significant and involved slippage as any large or series of large orders would reasonably create. CoinFlex kept Ver informed, wherein he had cooperated and promised to pay or increase collateral to cover the shortfall, but the promise was empty.
The company is now seeking legal action against Ver as he is liable for the $84 million and has refused to pay. Word is that CoinFlex has a strong case, which will take place at Hong Kong International Arbitration Centre (HKIAC). It may take up to 12 months for the matter to be resolved.