Even if the trades were lost on leverage, Coinflex would have the entire amount of funds on their exchange, not magically lost 84m-110m and only have 10m left.
The 84m had to be off their platform and on some other one.
They probably borrowed all user funds, hedged all the positions on futures, and put everyones cash into USTerra (the magical yield they provided to everyone). Then UST went bust and the they couldnt return the funds.
They have not explained how the lost funds are not on their platform, so we have to speculate. We can assume what really happened was much worse than our guesses or they would just tell us.
Edit: USTerra went bust in late May 2022. One month later in early July 2022 Coinflex collapsed. These events are likely linked, especially because some users reported withdrawals were stopped before the official time of collapse. They were likely insolvent and operating on fractional reserves after the UST collapse.
They are "restructuring" without coming clean about WTF happened. Its complete bullshit and they are getting away with it.
How could they allow a withdrawal for 84 Million, while supposedly owing 170m (85m to users, and 85m to the trader withdrawing), putting them at an 85M insolvent position? Unless they didnt, and this story is never happened.