Some creditors of cryptocurrency futures exchange CoinFLEX claim that OPNX, a new cryptocurrency exchange founded in part by Three Arrows Capital (3AC) co-founders Kyle Davies and Su Zhu, was created using CoinFLEX assets without their consent.
According to a subpoena filed with Hong Kong High Court and seen by Cointelegraph, CoinFLEX creditors allege that OPNX co-founder and former CEO Mark Lamb “misappropriated and/or otherwise misappropriated assets, human resources, intellectual property, (…) CoinFLEX Trade Secrets and Other Technology” and transfer them to OPNX. The complaint alleges that Lamb’s actions violated his responsibilities to CoinFLEX’s creditors during his tenure.
Citing the filing, the creditor said Lamb devoted “time, attention, skill and/or effort” to building OPNX while serving as CEO of CoinFLEX.
The documents allege that the former CEO transferred customers and business opportunities to rival exchanges, misappropriated assets belonging to creditors, falsely stated that OPNX had ties to CoinFLEX creditors, disclosed confidential trade secrets to third parties, and encouraged employees and contractors to transfer to OPNX. Forged false confidentiality agreements between itself and third parties and engaged in other conduct detrimental to creditors.
According to one creditor who spoke to Cointelegraph, CoinFLEX’s terms of service require users to resolve disputes through arbitration in Hong Kong, which is why the creditor filed legal proceedings in Hong Kong rather than Seychelles, where the company is registered. The allegations have not yet been proven in Hong Kong’s High Court.
The plaintiffs listed in the filing are two companies: Liquidity Technologies and Liquidity Technologies Software.First, legitimate companies based in Seychelles, according to Crunchbase entity CoinFLEX initially operated under this framework. The filing names Mark Lamb, crypto investor Roger Ver, Open Technologies Holdings and Open Technology Markets as defendants. The document claims that Open Technologies Holdings and Markets are two companies associated with the OPNX cryptocurrency exchange.
In January, promotional material for OPNX was leaked to the public and later confirmed to be authentic by the founding team. The deck lists Davies as OPNX co-founders, along with Zhu, Mark Lamb and Sudhu Arumugam. In September, Zhu was arrested at Singapore Changi International Airport for failing to comply with a Singapore court order regarding 3AC’s bankruptcy proceedings. Davis was also sentenced to four months in jail for contempt of court, but was outside Singapore’s jurisdiction at the time of sentencing. He has since been spotted in Bali, Indonesia.
Critics, including BitMEX co-founder Arthur Hayes, Tech Crunch founder Michael Arrington, and finance and macro finance executive Nik Bougalis, previously argued that investors had lost millions or even billions of dollars after the OPNX founder They should not be given more money. USD customer assets.
However, OPNX refutes this criticism. When the exchange opened in April, it claimed it would benefit creditors and therefore creditors of bankrupt companies by allowing them to sell their claims on the exchange in exchange for quick cash. Kyle Davis even said he would donate his share to 3AC creditors.
In February, OPNX CEO Leslie Lamb (also the wife of OPNX co-founder and CoinFLEX CEO Mark Lamb) release LinkedIn said: “We are pleased to announce that CoinFLEX will officially change its name to Open Exchange (OPNX).” Contrary to this statement, the subpoena filed with the court claims that OPNX is an independent exchange that was never authorized by CoinFLEX’s creditors.
In a conversation with Cointelegraph, a CoinFLEX creditor who wished to be known as “Kiril” provided more details about the allegations made by the creditors. Kirill claimed that he lost “the vast majority of (his) net worth” when CoinFLEX stopped processing withdrawals. Kirill said he and other creditors formed an “ad hoc committee of creditors” to figure out what to do with the now-bankrupt company after withdrawals were halted. They also involve some of CoinFLEX’s initial investors. After months of deliberations, the committee decided to reorganize the company and reopen the exchange.
Kirill said that during this period, he became aware that Mark Lamb was talking to Davis and Zhu about investing in the new reorganized company. Kirill claimed that they were skeptical about the involvement of the 3AC founders in the project. However, they claim that CoinFLEX has no formal way to accept or reject them as investors as the company is still undergoing court reorganization.This reorganization is officially recognized According to a CoinFLEX blog post, March 7.
According to Kirill, after the reorganization was approved, CoinFLEX creditors discovered that Mark Lamb acted in a manner that violated the manner described in the subpoena order and harmed the interests of creditors.
related: Roger Ver denies CoinFLEX CEO’s claim that company is owed $47 million USDC
After discovering the activities, creditors filed a subpoena, which Kirill claimed was the first step in obtaining an injunction against Mark Lamb to wrest control of the company from him. They then applied for an injunction, which Kirill claims was granted by the court. The injunction allegedly states that Mark Lamb “may not claim to be a decision-maker at Coinflex without the express consent of a majority of the board of directors.”
October 31, X’s official OPNX account (formerly Twitter) release Issue a “creditors’ tender offer” to CoinFLEX’s stakeholders. The offer states that CoinFLEX creditors who accept the offer “will jointly receive 25% of the equity in OPNX, distributed in proportion to the size of the claims.” In addition, they will each receive a portion of the exchange’s native token OX, but these tokens will be Granted for ten years. Kirill responded that the tender offer was not legally binding and said:
“This has no legal effect. How does Mark intend to quote? You need the board to transfer the shares. They are not transferred by an independent party. Mark is no longer a CoinFLEX Seychelles board member. He does not have the authority to transfer the shares.”
Kirill also claimed that the tender offer lacked the financial information for investors to make informed decisions. He argued that this made it unreasonable for investors to accept the offer. “An important part of Mark’s proposal is that it has no message at all,” Kirill said. “No reasonable trustee would approve such a proposal.”
Cointelegraph also obtained an order from the Seychelles Supreme Court that revealed Roger Ver’s role in the legal dispute. According to the order, CoinFLEX accused “a large individual customer (Roger Ver)” of breaching a “written margin agreement.” According to CoinFLEX, which was cited in the court order, this default initially caused the exchange to be unable to process withdrawals.
Cointelegraph contacted Roger Ver for comment. He denied that he waived a valid bond agreement. Instead, Ver said, CoinFLEX made his trading positions known to third parties, who used that information to trade against him, to his detriment. He claims that CoinFLEX has agreed to arbitration, allowing him to recover funds from these third parties.
“I never defaulted and never owed CoinFLEX the $82 million they originally claimed,” Ver said. “The fact is, and CoinFLEX has now agreed to the fact, is that I have always been the one who was owed money, and I was the biggest victim.”
An OPNX spokesperson declined to comment on the allegations. Since its launch in April, OPNX has developed “oUSD”, a credit currency for margin trading, and received a Lithuanian license for spot trading across the European Union.
According to Coingecko, OPNX currently process Daily spot trading volume exceeds US$32,000 and derivatives trading volume exceeds US$82 million. Criminal and civil lawsuits against OPNX co-founders Davis and Zhu are ongoing.
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