Crypto Exchange CoinFLEX Limits Withdrawals, Keeps Most Assets Locked

CoinFLEX is attempting to resolve its issues by limiting withdrawals ahead of a possible acquisition from equity investors.

article-image

CoinFLEX | Source: Shutterstock

share

key takeaways

  • Following a three week shutdown, CoinFLEX said it was opening limited withdrawals to the tune of 10%
  • Certain derivatives contracts and open positions on the platform will be closed until further notice

Embattled crypto exchange CoinFLEX said Thursday it has decided to open withdrawals from its platform, albeit under severely limited terms, three weeks after halting the ability to do so.

Users will now be able to withdraw their funds to the tune of 10% with the exception of flexUSD — the exchange’s interest-bearing stablecoin — which cannot be withdrawn until further notice, CoinFLEX said.

The exchange joins a host of other troubled crypto businesses, including lenders and exchanges, in their attempts to wade through the fall out resulting from a liquidity crunch and extreme market volatlity.

Last month, CoinFLEX suspended all withdrawals from its platform citing “extreme market conditions” and continued uncertainty involving an unnamed counterparty for its reasoning. That counterparty was later alleged by CoinFLEX’s chief to be Roger Ver, early bitcoin adopter and CEO of Bitcoin.com.

Ver, sometimes referred to as “Bitcoin Jesus,” was accused by CoinFLEX’s CEO Mark Lamb of owing the exchange $47 million late last month. Ver, who has denied the claims on more than one account, was accused roughly two weeks later by Lamb of owing more than $84 million following calculations of Ver’s final “significant” losses in the exchange’s native FLEX token.

Before final calculations of Ver’s alleged unmet margin call were made, Lamb claimed he was attempting to turn a “problem into an opportunity” by issuing a new token in the hopes of recovering the $47 million shortfall.

Ahead of limits being lifted, CoinFLEX said in its update to users that it would cancel all current pending withdrawals and return all funds to their respective account balances.

“We truly apologize for the trauma this situation has caused the CoinFLEX community,” the exchange’s founders wrote last week. “It is understandable that you vent your frustration at us and continue to do so when you feel we have not been communicative enough. One of the main reasons for our lack of responsiveness in the last two weeks is that we have been looking for companies/partners to invest in CoinFLEX.”

Users’ subaccounts, used for the purpose of derivatives trading and other activities, will also be rolled into their main accounts. Certain open perpetual contract positions will require liquidation when the FLEX/PERP price is updated resulting in a subset of these accounts falling into negative equity, the exchange said.

“To protect other creditors on the platform, we must merge the balances and positions in all subaccounts with their respective main accounts,” CoinFLEX wrote. FlexUSD will no longer hold short perpetual positions and therefore holders will not earn any interest “for the time being.”

The exchange also said it was attempting to resolve its issues with the future possibility of enabling further withdrawals while seeking out a potential acquisition from equity investors. Further updates on its next course of action are expected by the end of next week.


Get the news in your inbox. Explore Blockworks newsletters:

  • Blockworks Daily: The newsletter that helps thousands of investors understand crypto and the markets, by Byron Gilliam.
  • Empire: Start your morning with the top news and analysis to inform your day in crypto.
  • Forward Guidance: Reporting and analysis on the growing intersection of crypto and macroeconomics, policy and finance.
  • 0xResearch: Alpha directly in your inbox. Market highlights, data, degen trade ideas, governance updates, token performance and more.
  • Lightspeed: Built for Solana investors, developers and community members. The latest from one of crypto’s hottest networks.
  • The Drop: For crypto collectors and traders, covering apps, games, memes and more.
Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template Presentation.jpg

Research

The Solana validator landscape has changed drastically over the past year. The chain now has 1,332 active validators with 380.9 million SOL staked (63.9% of supply) as of February 2025. Validator revenue had diversified beyond inflationary rewards (still making up 55%) to include Jito tips (30%), priority fees (24%), and base fees (<1%), in January, especially with the increased activity on Solana. Since then, issuance has become dominant again (76%), while Jito tips (14%), priority fees (9%), and base fees (less than 1%) have reduced in share of February 2025. There has been a strong shift towards non-inflationary revenue sources, which have become more central to validator economics as priority fees and off-chain blockspace auctions gain traction. Client diversity has also improved drastically, with implementations such as Agave, Jito-Solana, and Frankendancer already in use, and upcoming clients like Firedancer and Sig expected to further strengthen resilience and reduce reliance on a single codebase.

article-image

BWR analyst Carlos Gonzalez Campo explains the consequences of SOL inflation and transfers lost to “leaky buckets”

article-image

Empire co-host Santiago Santos makes the case that memecoins have actually helped push infra forward…just not in the way you think

article-image

A16z Crypto lists seven buckets for tokens and recommendations for how to regulate them, in a filing submitted to the SEC

article-image

New model aims to resolve trading inefficiencies with a single execution layer and market maker changes

article-image

Investors navigating BTC face short-term unpredictability, influence from other markets

article-image

The GENIUS Act aims to establish regulatory guidelines for stablecoins