CoinFLEX announces staff cuts as part of measures to reduce costs by up to 60%

Cryptocurrency exchange CoinFLEX said it had downsized a “significant number” of team members in an effort to cut operating costs.

According to a Friday blog post, CoinFLEX said it had cut some staff across “all departments and geographies” as part of measures to reduce the company’s costs by 50% to 60%. The majority of the remaining team members will focus on product and technology, and the exchange said it would consider scaling as “volume comes back.”

“The intention is to remain right-sized for any entity considering a potential acquisition of or partnership opportunity with CoinFLEX,” said the exchange.

On Saturday, CoinFLEX halted withdrawals after an unnamed party reportedly failed to meet a $47 million margin call. CEO Mark Lamb later took to Twitter to confirm rumors that CoinFLEX had a written contract with Bitcoin Cash (BCH) proponent Roger Ver “obligating him to personally guarantee any negative equity on his CoinFLEX account and top up margin regularly.” Ver has denied the exchange’s claims.

Roger Ver owes CoinFLEX $47 Million USDC. We have a written contract with him obligating him to personally guarantee any negative equity on his CoinFLEX account and top up margin regularly. He has been in default of this agreement and we have served a notice of default.

— Mark Lamb (@MarkDavidLamb) June 28, 2022

Though CoinFLEX partially reopened user withdrawals on July 14, many users have expressed concerns about the exchange’s liquidity amid other insolvency issues with Three Arrows Capital, Voyager Digital and Celsius Network. Estimates later suggested that CoinFLEX’s shortfall could be as high as $84 million, for which the firm has started arbitration procedures in Hong Kong.

Related: Crypto firms facing insolvency ‘forgot the basics of risk management’ — Coinbase

Following its halting of withdrawals, CoinFLEX initially said it planned to fix its liquidity shortage by issuing a new token, Recovery Value USD (rvUSD). Though no tokens have been released at the time of publication, the exchange said on Friday it still planned to move forward with the recovery plan:

“We continue working with lawyers and the significant creditor group on the details around the distribution of the CoinFLEX Composite (inclusive of rvUSD, equity, and FLEX Coin) and expect to have numbers around this next week so that we can put this to a vote from all depositors as soon as possible thereafter.”