Original title: Hobbled Crypto Exchanges Creditors Are Suing Its CEO and Want to Claw Back Money From Bitcoin Jesus
Original author: Sam Reynolds, Sam Kessler, CoinDesk
Original compilation: Kaori, BlockBeats
Editors note: BlockBeats reported that on October 26, creditors of the crypto trading platform CoinFLEX sued CoinFLEX CEO Mark Lamb, accusing Mark Lamb of breaching his fiduciary duties at CoinFLEX when launching OPNX.
In a document filed by CoinFLEXs creditors with the Hong Kong Civil Court on October 12, OPNX was called a competing enterprise of CoinFLEX. OPNX was not authorized by CoinFLEX’s board of directors or creditors, and Mark Lamb misappropriated the company’s intellectual property, technology, customer base and employees to build the trading platform. The subpoena also accuses Mark Lamb of acting without authority in connection with the settlement agreement with Roger Ver.
On the other hand, another protagonist of the story, Roger Ver, known as the Bitcoin Jesus, is also involved in this dispute. From his perspective, he is the plaintiff, and Mark Lamb violated the confidentiality agreement and deliberately Misrepresenting it to the entire world that CoinFLEX is the plaintiff.
In January 2023, a fundraising document for GTX was leaked, which was promoted as a first-of-its-kind trading platform dedicated to trading bankruptcy claims. The company is backed by Su Zhu, Kyle Davies, Mark Lamb and CoinFLEX co-founder Sudhu Arumugam, and will be CEOed by Leslie Lamb, wife of CoinFLEX CEO.
GTX’s funding documents immediately attracted attention. 3AC’s Zhu and Davies were once considered early DeFi and NFT luminaries in the cryptocurrency space, but by the time they partnered with CoinFLEX, their reputations had been challenged, by which time 3AC had collapsed, fueling the broader cryptocurrency market decline. .
CoinFLEX said in a memo about the dispute with GTX and its team that the new venture will mark an evolution of CoinFLEXs commitment to building an open and transparent financial market and will increase CoinFLEXs creditor value.
However, CoinFLEX’s creditors now claim that Mark Lamb breached his fiduciary duties in his role at CoinFLEX after he launched claims platform GTX (later renamed OPNX).
Translator’s note: Fiduciary responsibility is also called “accounting responsibility” and “operating responsibility”. Under the condition that the ownership of property or means of production and the right to operate and manage the property are separated, the manager shall bear the responsibility to the owner because he accepts the entrustment or order to manage and use the property or means of production. The relationship between the manager and the owner arising from the fiduciary responsibility assumed by the manager is called the fiduciary responsibility relationship.
In Hong Kong civil court documents filed by CoinFLEX creditors, OPNX is considered a competing business with CoinFLEX and is listed as a co-defendant along with Lamb and CoinFLEX investor Roger Ver.
Creditors describe the newer platform as a dishonest turn by Lamb and his closest associates, who believe he should be banned from representing or speaking about CoinFLEX in the future.
Mark Lamb did not respond to a request for comment sent by CoinDesk, although Telegram showed that he had read the message and followed one of the authors of this article after the private message was sent. Leslie Lamb also did not respond to a request for comment sent via Telegram.
From GTX to OPNX
In June 2022, 3AC was forced into liquidation as Zhu and Davies built their empire on huge unsecured loans from the largest loan providers in crypto. They used the borrowed money to fund a series of failed cryptocurrency bets, leaving 3AC creditors with a $3 billion shortfall, dealing a heavy blow to the industry from which it has still not fully recovered.
When GTXs funding documents leaked, some thought it was highly ironic, and maybe even a joke, that Zhu and Davies would embark on a new venture, especially one focused on cryptocurrency bankruptcy. The similarity in name to the largest cryptocurrency crash trading platform in history, “FTX,” also reinforces this impression.
However, while CoinFLEX and many other crypto platforms are now out of business, OPNX, which received minimal attention and publicity, has not. The platform launched publicly in April 2023 and has been running ever since.
“Improving the transparency of our trading platform is at the heart of many of the things we are doing, from our public market-making initiatives to provable solvency, and the aggregation of these different things will make users more willing to trade in a public place. A transparent trading platform for trading. Obviously, this needs to be supported by sufficient liquidity, because if your trading platform does not have pricing power, people will not come no matter how transparent it is. So these two aspects must work together to ensure liquidity. sex, but also ensuring transparency.
But we believe that if we build the right trading platform model with transparency at its core, this will be able to act as a flywheel on its own during the next market cycle. If we continue to execute and build a diverse user base, adding more liquidity, people will start to understand what a trading platform for the crypto market should look like.
Case against Lamb
OPNX is officially promoted as a direct rebrand of the CoinFLEX trading platform. CoinFLEX’s website was still online at the time of the news, but a notice warned users to withdraw all funds from the platform before October 31, 2023, when the company will “officially cease operations and shut down.”
The website also promotes its new platform to users: “CoinFLEX will be migrating to OPNX (Open Trading Platform) in the coming months. We encourage you to migrate your account balances.”
But in an October filing from creditors, they claimed that OPNX was created without authorization from CoinFLEX’s board of directors or creditors. They accused Mark Lamb of taking unauthorized action and taking the companys intellectual property, technology, customer base and employees to build a claims trading platform.
OPNX is registered in the Seychelles but has an office in Hong Kong. A spokesman for the creditors committee told CoinDesk that a copy of the subpoena was delivered to the Hong Kong office on October 12. The document was used to start civil proceedings, and CoinDesk obtained a copy from a spokesperson.
CoinFLEXs creditors claim that Lamb, who served as CoinFLEX CEO and co-founder, entered into a license with OPNXs parent companies - Open Technologies Holding LTD and Open Technology Markets LTD - that was manifestly uncommercial and harmful to CoinFlexs interests. and purchase agreement, or apparently for the benefit of Lamb and OPNX.
CoinFLEX’s creditors are seeking to have these license and purchase agreements invalidated. They also hope to temporarily place all of OPNXs assets and profits into a trust.
OPNX is difficult to get started
Crypto news site Protos reported earlier this month that OPNX was struggling to find its footing after opening. So far, the only insolvency claim tradable on the platform comes from FTX. The price of OPNX’s “OX” token has also fallen by 83% from its August high.
In August, OPNX was fined $2.7 million by Dubais crypto regulator for non-compliance, and the claims trading platform was not listed as a virtual asset trading platform authorized by Hong Kongs securities regulator.
Zhu was detained in Singapore last month in connection with alleged non-compliance during 3ACs bankruptcy proceedings. Davies exact location was not known to the public at press time, but 3ACs liquidators said in a statement last month that he was also sought by Singaporean authorities for allegedly failing to cooperate with insolvency proceedings.
“Bitcoin Jesus” Appears
OPNX’s subpoena also accuses Lamb of including CoinFLEX in a settlement agreement without authorization with Roger Ver, a prominent crypto entrepreneur and early evangelist sometimes referred to as the “Bitcoin Jesus.”
Roger Ver was one of the initial investors of CoinFLEX in 2019. However, his relationship with the exchange eventually soured, and in mid-2022, they made headlines when CoinFLEX entered arbitration proceedings to recover what the exchange said was $84 million in debt he had accumulated on the platform.
During the extreme market volatility that followed the Terra-Luna cryptocurrency crash in the first half of 2022, Roger Vers margin trading account suffered heavy losses and CoinFLEX failed to liquidate Roger Vers huge position in time and was eventually forced to seek a restructuring, triggering the Roger Ver and Lamb in an ongoing dispute over responsibility for the platform crash.
Publicly, Lamb offered Roger Ver a two-year free trading agreement, allowing him to trade on OPNX. Lamb also provided equity in OPNX to blockchain.com co-founder Peter Smith and people with ties to Roger Ver in exchange for being a market maker.
The new lawsuit from CoinFLEX creditors seeks to recover benefits or traceable proceeds from Roger Ver as part of the eventual settlement agreement with Lamb.
But Roger Ver told CoinDesk in an email on Monday that public records of his dispute and settlement with CoinFLEX don’t tell the full story.
According to Roger Ver, who has yet to be subpoenaed in connection with the Hong Kong subpoena, the truth about the alleged “sham arbitration” with CoinFLEX has been distorted in Lamb’s public statements, press releases, and correspondence with CoinFLEX’s creditors.
Roger Ver said that he started an arbitration case against CoinFLEX in June 2022, seeking compensation of US$200 million, claiming that this was the loss caused by his trading on the platform. Roger Ver claimed that he had “evidence that certain third parties were aware of my large position on CoinFLEX and conducted transactions to my detriment.”
“I am the plaintiff, not CoinFLEX,” Roger Ver insisted, adding that the lawsuit is confidential under Hong Kong law. CoinFLEX later filed an $84 million counterclaim, claiming that Lamb violated the confidentiality agreement and intentionally misrepresented to the entire world that CoinFLEX was the plaintiff.
Roger Ver stated that he eventually settled out of court with CoinFLEX and Lamb. Under the settlement, Roger Ver said he was entitled to benefit from the first $100 million of the liable third parties in further legal proceedings now being considered.
In Roger Vers account, the proceeds from his alleged settlement with CoinFLEX, which CoinFLEXs creditors appear to intend to recover, should be his. The story told by Mark Lamb is false. In fact, I am the biggest victim of CoinFLEX, Roger Ver insisted.
