London Block Exchange (LBX), a UK-based crypto company established less than eighteen months ago, has been forced to deny rumors that they are facing liquidation following an attempt by a creditor to wind up the company due to debts owed. The winding up petition, which is typically used when creditors feel that the best chance of them recovering their investment is to stop the company operating, was served back in March. Since then others have chipped in on the case, most notably Peter McCormack of Craig Wright lawsuit fame, which has caused LBX to come out fighting.
LBX Counters Claims
The winding up petition was served by law firm Squire Patton Boggs back in March over non-payment of fees, but a sea of enquires from concerned customers has forced LBX to issue a statement to clarify the situation and deny the accusations that have been made:
There have been some comments made regarding LBX on Twitter over the weekend. The allegations are erroneous and misleading. We are speaking to our advisors, and we will be issuing a detailed statement later in the week. In the meantime, rest assured that any clients funds are entirely ring fenced, and separate funds are in place to satisfy any pension obligations. We are in the final stages of finalising a refinance and have both commitments and letters of intent for further funding from strategic partners.
CEO Downplays Allegations
London Block Exchange CEO Benjamin Dives has since stated that the sum in question is some $12,800, a fee levied by Squire Patton Boggs for their services. According to Dives, this bill wasn’t paid on time, so the law firm increased the fee before eventually serving the winding up petition. This incident on its own would not necessarily have caused concern among LBX customers and investors, but it comes on the back of other rumors, fueled by McCormack among others, that LBX is insolvent:
1/ UK Cryptocurrency exchange @LBXSocial is trading insolvent and has been since Autumn 2018. Further:
– Staff have not been paid since Dec ’18
– The CEO @benjamindives has spent the pension pot
– Creditors are owed £millions
– There are no developers to fix app issues
— Dr. Peter McCormack (@PeterMcCormack) April 27, 2019
LBX’s Difficult Start to Life
LBX launched in late 2017, at the peak of crypto fever, and had planned to launch with a crypto debit card, even going as far as taking applications. This plan bit the dust however, along with a raft of other crypto debit cards such as Crypto.com, when Visa cancelled its deal with card provider WaveCrest. LBX has since expanded its offering to include a mobile-first crypto exchange platform for UK customers, although plans to launch its own token were scrapped toward the end of last year, citing the poor state of the market.