OX.FUN Crypto Exchange Under Scrutiny Amid Insolvency Claims

A hybrid perps crypto derivatives exchange, OX.FUN, has come under fire following accusations of insolvency. The exchange, backed by co-founders of the failed Three Arrows Capital hedge fund, is facing scrutiny as data suggests it primarily holds its own OX token.

Denial of Insolvency Claims

OX.FUN has denied the insolvency claims, stating that “all withdrawals are processing normally” in an X post on February 24. The exchange accused NFT artist JefeDAO of attempting to exploit the platform and trigger a “coordinated FUD” through a social media campaign.

“All withdrawals are processing normally. This is coordinated FUD. No users were affected by the actions of JefeDAO aside from JefeDAO. He attempted to exploit the platform, got all of his funds frozen, and now is attempting a social media campaign.”

Dispute Over Frozen Funds

The dispute began when JefeDAO claimed that one of its members deposited $1 million in USD Coin (USDC) into OX.FUN but was later unable to withdraw the funds. OX.FUN’s founder, Nicolas Bayle, responded by accusing JefeDAO of engaging in an “oracle manipulation attack,” which involved placing large limit orders below fair market prices and closing short positions at lower levels.

JefeDAO refuted the allegations and claimed that Bayle offered to return the funds in exchange for daily social media promotion of the platform.

“I literally know this is 100% fraud just based on the fact that it is highly unusual and suspicious for an exchange to request the promotion of their social media accounts as a condition to return someone’s funds.”

Concerns Over OX.FUN’s Wallet Balance

Coinbase’s head of product, Conor Grogan, suggested that OX.FUN’s wallets primarily hold its own OX tokens. He further stated that if the platform processes a pending $1 million USDC withdrawal, its USDC balance would drop to around $1,000.

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Disclaimer: This article is for informational purposes only and should not be considered as investment advice.

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