Crypto hedge fund Three Arrows Capital (3AC) now in liquidation

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Mark Lamb, the CEO of embattled cryptocurrency exchange CoinFlex, said that withdrawals will probably not restart on Thursday as the company initially hoped.

To fix the $47 million hole in CoinFlex's balance sheet, the company is issuing a token called Recovery Value USD, or rvUSD, and enticing investors with a 20% interest rate. Lamb said the ability to pay that interest rate would come from recouping the funds from Roger Ver plus a "financing charge" that has been imposed on him.

CoinFlex claimed that Ver's account went into "negative equity." Normally, the exchange would liquidate an investor's position in this situation. But Ver had a particular agreement that meant this did not happen, the exchange said.

The agreement between CoinFlex and Roger Ver, aka “Bitcoin Jesus”, meant that if the investor failed to meet a margin call, then his positions would not be automatically liquidated as would normally be the case.

A margin call is a situation in which an investor must commit more funds to avoid losses on a trade made with borrowed cash.

Lamb said that CoinFlex felt comfortable to go into such an agreement because of the "data we'd seen around his capitalization."

But CoinFlex will now be eliminating such agreements, Lamb said.

"In hindsight, having no non-liquidation agreements would have definitely been better," Lamb said.

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