Creditors of CoinFLEX, a bankrupt exchange, sue CEO Mark Lamb and early investor Roger Ver, aka Bitcoin Jesus, alleging breach of fiduciary duty over the new exchange OPNX launch and unauthorized use of company assets.
On October 25, creditors of the now-defunct cryptocurrency exchange CoinFLEX accused CEO Mark Lamb of breaching his fiduciary duty by creating a new company, OPNX, in collaboration with the founders of the failed crypto hedge fund Three Arrows Capital.
In a Hong Kong civil court filing dated October 12, the creditors have characterized OPNX as a “competing business” in relation to CoinFLEX and said that Lamb should be barred from acting or speaking on CoinFLEX’s behalf. As a result, OPNX, Mark Lamb, and CoinFLEX investor Roger Ver have all been named as co-defendants in the case, reflecting the creditors’ claims that Lamb’s actions violated his obligations to CoinFLEX.
Leslie Lamb, who currently serves as the CEO of OPNX and the wife of Mark Lamb, made a LinkedIn post announcing that ‘CoinFLEX will be officially rebranding to Open Exchange.’
However, this rebranding had not received approval from CoinFLEX’s board or creditors. Creditors claim that Mark Lamb acted independently and improperly by appropriating CoinFLEX’s intellectual property, technology, customer base, and employees to establish OPNX.
The creditors allege that Lamb entered into a licensing and purchase agreement with OPNX’s parent companies, which they view as being detrimental to CoinFLEX’s interests and not commercially sound. Consequently, they are seeking to nullify the licensing and purchase agreements related to OPNX and want all assets and profits from OPNX to be placed into a trust temporarily.
CoinFLEX Lawsuit Unveils Legal Battle Over Roger Ver’s Settlement Agreement, as Creditors Seek Recovery of Proceeds
Furthermore, the suit accuses Lamb of unauthorized actions when he entered CoinFLEX into a settlement agreement with Roger Ver, a well-known crypto entrepreneur and early evangelist often referred to as “Bitcoin Jesus.”
Roger was initially a prominent investor in CoinFLEX but had a tumultuous relationship with the exchange when they failed to liquidate a position held by Ver during the Terra-Luna crash. This caused Roger to incur an $84 million debt on the platform, which eventually led to the eventual collapse of the exchange.
In response, Ver initiated an arbitration case against CoinFLEX, seeking damages of $200 million and alleging that third parties had knowledge of his substantial positions on the platform and traded against them to his detriment.
Lamb publicly offered Ver a deal for free trading on OPNX for two years and offered equity to Peter Smith, an associate of Ver, in exchange for acting as a market maker.
The arbitration case was eventually settled out of court, but Ver is now named as a defendant in the new legal case.
The new legal case initiated by CoinFLEX’s creditors aims to recover any “benefits and/or traceable proceeds” that Roger Ver received as part of his settlement agreement with Mark Lamb.
However, Ver’s stance is that the earnings from this settlement should not be subject to clawback, as he considers himself the primary victim of CoinFLEX’s actions. Ver also contends that the public record of his dispute and subsequent settlement with CoinFLEX does not fully capture the details of the situation.
OPNX Exchange Faces Uphill Battle After Rebranding from GTX, Co-Founders Su Zhu and Kyle Davies Embroiled in Controversy
In January, a pitch deck for the new exchange was leaked. The exchange OPNX was originally conceived as GTX, a company focusing on trading bankruptcy claims, naming Mark Lamb, CoinFLEX co-founder Sudhu Arumugam Su Zhu, and Kyle Davies as founders. OPNX, the platform that emerged from GTX, was launched publicly in April 2023 under the leadership of Mark Lamb’s wife, Leslie Lamb. The exchange has been operational since that time, but it has gained minimal traction or attention within the crypto community.
At the time, the name GTX was adopted as a play on FTX’s name since the exchange had just gone bust several months before. OPNX has faced challenges since its launch, including limited activity on its platform and a drop in the price of its token. Additionally, it was fined for non-compliance by Dubai’s crypto regulator and is not a licensed virtual asset exchange in Hong Kong.
However, the further cause of the challenge was the involvement of Su Zhu and Kyle Davies, the co-founders of 3 Arrows Capital, who faced challenges to their reputations following 3AC’s collapse.
During the cryptocurrency bull market, these co-founders were seen as influential figures in the industry. However, following the Terra-Luna market crash, 3 Arrows Capital was ordered into liquidation, and its reputation took a significant hit.
Meanwhile, their return to the spotlight was met with criticism and mockery on Twitter, as a user not only highlighted the collapse of 3AC but also questioned the proposal for a new exchange.