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A creditor filed a lawsuit against the London Block Exchange (LBX) in an attempt to liquidate the cryptocurrency exchange, but the CEO of the startup has denied its closure.
Squire law firm Patton Boggs (UK) LLP served the petition at LBX on 19 March at the High Court of Justice in London. A hearing on this case is scheduled for Tuesday, said Benjamin Dives, CEO of London Block Exchange.
Russell Hill, Squire partner Boggs, told CoinDesk:
"We filed a petition for liquidation against the company to publicly declare a debt owed to us. At this point, because of ongoing litigation, it is inappropriate for me to say anything else. "
As a general rule, a creditor asks a lawyer to dissolve the debtor company in order to recover its debts or to prevent it from aggravating its debts. This can be done by any creditor with debts of more than 750 pounds sterling (about 968 dollars) and is generally considered a serious action to be taken against a company because it means that the company's directors may be required personally liable for the debts they do not act quickly.
However, Dives told CoinDesk that the debt in question was only £ 9,900 (approximately $ 12,787). Squire Patton Boggs wrote the terms and conditions of the LBX website and provided some other legal services, said Dives. The bill was not paid for long, the law firm became angry and asked for higher fees, he said.
"The bill has not been brought to my attention before it's too late," Dives said Friday. According to him, LBX sent the money to the firm, but it never reached Squire's account. However, he made sure that the court will decide in favor of LBX, adding:
"We are getting calls from people who think we are going to close, but we are not in liquidation."
As a result of this conversation, Peter McCormack, host of the popular podcast "What Bitcoin Did", alleged on his Twitter feed LBX was insolvent and owed "millions" to its creditors and this staff had not been paid since last year. He did not identify the sources of this information.
The dives could not be contacted for further comments by the time press.
Rumors of financing
LBX was based in the iconic Level39 technology space in Canary Wharf, London, which housed a number of cryptographic and block-chain companies including CEX.IO, eToro and Revolut.
However, a Level39 representative stated that LBX no longer occupied shared workspace since 2018. (The cost of a Level39 heating desk starts at around £ 400 per month and the fixed office costs around £ 700 per month. months.)
An industry source told CoinDesk that there had been rumors that the company was trying to raise capital in recent months. The data and APIs that would define LBX trading volumes had not been provided, the source added.
The London Block Exchange (LBX) was launched in November 2017 after collecting 2 million pounds (about $ 2.6 million) from investors, according to Business Insider.
With Credit Suisse's former banker Adam Bryant as executive chairman, the company had ambitious plans for a prepaid card allowing users to store and spend cryptographic data. The telecommunications service provider WaveCrest (which worked with all British companies offering encrypted prepaid cards) violated its terms with Visa, thus ending this business model in the United States.
However, LBX has pivoted to become the first mobile encrypted exchange on iOS and Android, courting British customers seeking to exchange crypto for pounds. In late 2018, LBX announced that it "manufactured" a digital book through a partnership with another chain-channel company, AlphaPoint.
In addition, Reuters announced the signing of an agreement between LBX, which is regulated by the Financial Conduct Authority (FCA) and ClearBank to provide the exchange of banking services.
The company had also scheduled a sale of LBX chips by the end of 2018, but later canceled it: "It is clear that the market's appetite for a public token sale will not only support our growth plans and, in fact, detrimental to our regulatory and investment roadmap. "
Image of the High Court of Justice of London via Shutterstock.
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