A petition has been filed against the London Block Exchange (LBX), UK’s first dedicated cryptocurrency exchange, in the High Court of Justice by Squire Patton Boggs, a law firm that claims to have not been paid for legal services it provided to the LBX. While the LBX has confirmed its association with Squire Patton Boggs, it has an entirely different story to tell as far as the alleged debt is concerned.
The law firm has filed a “winding-up” petition against the LBX, which according to the UK law is a petition filed by the creditor seeking complete closure of the debtor company to compensate the debt or at the very least a stay on its operations to stop the debt from worsening. A creditor can go in for such a severe action if the debt is of more than 750 British pounds.
The LBX while accepting its association with the law firm has also revealed the exact amount of the debt, i.e., 9,900 pounds and the reason for their failure to pay it back. Apparently, the delay from their side in clearing the payment angered the law firm which then asked for a higher fee than it was owed. Nevertheless, the LBX claims to have paid the entire amount to the law firm within 24 hours after the issuance of the petition.
The Ensuing Controversy
The unfortunate incident has sparked various rumors about LBX’s insolvency fuelled by Twitter personalities, like Peter McCormack who have put out tweets alleging that the LBX is headed towards bankruptcy, owes millions in debt and has failed to pay its staff for well over a year now.
LBX, however, has entirely denied these falsities and has assured its users that it’s not going out of business. The crypto exchange is now hopeful that the court would rule in its favor in the hearing scheduled to be held on Tuesday.