Today in Crypto Turmoil: Sun Readies USD 5B Spend, Celsius’ Dealings ‘Exposed,’ CoinFlex Heads to HK Courts

Tim Alper
Last updated: | 3 min read
Justin Sun. Source: a video screenshot, Youtube, Tron


The Tron (TRX) founder Justin Sun says he is ready to spend big on acquisitions as another week of crypto turmoil begins – and there are also developments from Celsius (CEL) (as usual!), while the exchange CoinFlex could be gearing up to flex its legal muscles on Roger Ver.

Here’s all you need to know:

Sun ready to shine on struggling crypto firms

In a tweet, Sun wrote that Tron was “friends with everyone” and was “always ready to serve.” He further told The Block that “lots of” companies had already reached out to both Tron and Sun for financial assistance – with many firms in the sector continuing to struggle.

Sun added that he was prepared to spend up to USD 5bn and that Tron was “engaging an investment bank” to “advise on potential deals.”

The Tron chief was quoted as explaining:

“Our interest is platforms with a large user base – both [centralized finance] and [decentralized finance] DeFi platforms.”

Sun concluded that “the worst” of the “de-leverage process” had “passed,” but opined that the industry “just” needed “to clean up and move forward.”

Celsius still in hot water

The crypto lender Celsius, which has had a torrid, event-filled summer, allegedly used USD 534m of its customers’ cryptoassets to carry out “high-risk leveraged crypto trading strategies.”

The claims were made in a report on the Celsius Network by the blockchain analytics specialist Arkham Intelligence. The firm stated Celsius executed its “strategies” with the help of a third-party assets manager – namely the “notorious Twitter personality and Ethereum wallet address 0xB1.” 

The strategies, however, returned “apparent losses of USD 350m when the asset manager returned capital” – a figure that has further shrunk following the market crunch, Arkham’s analysts added.

Arkham reported that Celsius had “potential gaps in risk management and accounting with corporate funds,” and said that evidence of this was to be seen “in its relationship with” 0xB1.

The analytics firm claimed that from August 2020 to April 2021, Celsius handed over the aforementioned USD 534m worth of tokens in 260 transactions.

0xB1, the firm added, then proceeded to invest these funds in a number of DeFi-related projects.

The Wall Street Journal, meanwhile, reported that Celsius has hired “new lawyers for restructuring advice,” quoting unnamed “people familiar with the matter.”

The same sources confirmed that Celsius had hired lawyers from the world’s largest legal firm by revenue – Kirkland & Ellis. The latter has been drafted in to “advise on options including a bankruptcy filing, replacing the company’s prior lead restructuring counsel,” the sources alleged.

CoinFlex en route to court

The crypto trading platform CoinFlex, which was founded in 2019 by Mark Lamb and Sudhu Arumugam, is ready to do legal battle with an unnamed client widely believed to be Roger Ver, the Bitcoin Cash (BCH) proponent.

In a blog post, the exchange – which suspended withdrawals in June – wrote that it had launched arbitration proceedings in Hong Kong in a bid to reclaim USD 84m in losses from the client.

Lamb has previously claimed that Ver defaulted on a USD coin (USDC) loan agreement to the tune of USD 47m. Lamb has claimed that Ver is contractually obliged to “guarantee any negative equity,” even though Ver has publicly stated that he is the one who is owed money.

In the latest CoinFLEX post, the exchange wrote that it believed it would take the firm around a year to obtain a judgment that would let it claim against the unnamed client’s assets.

The exchange wrote:

“The individual first asked us to liquidate his account, but then continued to tell us for some considerable time afterwards that he wanted to send significant funds to the exchange to take physical delivery of the futures positions.”

But, the exchange added, it is now “clear to us” that the client was in fact “wasting time and hoping for a bounce in the market that never materialized.”
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