From theblock by Danny Park

OX.FUN, the crypto derivatives exchange backed by Three Arrows Capital co-founder Su Zhu, rejected claims of insolvency in an announcement on Sunday.

"All withdrawals are processing normally," OX.FUN wrote in an X post. "This is coordinated FUD."

In its announcement, OX.FUN attached the social media post that claimed the insolvency. 

"Several now-former employees are reporting that [OX.FUN] is officially insolvent," said the X post from user "stevie_ravioli," with an attached screenshot that appears to be private messages from an OX.FUN employee laid off just hours prior. The former employee claimed that there was $180,000 left in the platform for withdrawals as of 23:00 UTC, according to the screenshot.

"So we were essentially triaging," the message from the screenshot said. "No idea how they plan on dispersing the last of the funds." However, the sender and recipient of the direct messages remained unclear.

The OX.FUN announcement did not address other allegations made in the X post such as the layoffs and the remaining amount of funds. 

Amid varying claims about the remaining funds at OX.FUN, onchain data platform Arkham Intelligence shows that OX.FUN has nearly $1 million worth of funds, mostly in its native token OX.

The Block has reached out to OX.FUN for further comments.

JefeDAO dispute

The exchange's troubles originated from its dispute with JefeDAO.

On Feb. 21, JefeDAO posted on X that one of its members deposited 1 million USDC into OX.FUN, but was unable to withdraw a few hours later. The platform allegedly stated that the user violated its terms of service without specifying the wrongdoing.

In response to JefeDAO’s post, Nicolas Bayle, founder of OX.FUN that also goes by nickname Nico, argued that a member of JefeDAO has attempted to exploit the platform, violating its terms and conditions.

"We do not tolerate bad actors — user protection remains our highest priority," wrote Nico, who added that the platform would need to communicate with the individual privately.

In a follow-up post on Sunday, JefeDAO claimed that Nico offered the return of 1 million USDC in exchange for extensive promotion of OX.FUN on social media on a daily basis.

"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," JefeDAO wrote. "OX.FUN is a scam exchange and I will keep posting until my funds are returned in full. This is extortion."