A mudslinging match is developing between cryptoborse CoinFLEX and star investor Roger Ver over a debt of up to $47 million. CoinFLEX had previously suspended withdrawals for all customers.
The crypto scene may currently follow a spicy duel between crypto exchange CoinFLEX and prominent investor Roger Ver with popcorn potential – as long as you are not a CoinFLEX customer yourself. Because the platform had to announce on June 24 to suspend all withdrawals for the time being. The step was justified with uncertainties because of a counterparty. Yesterday, Monday evening, CoinFLEX CEO Mark Lamb made it public via Twitter that the counterparty is Roger Ver, who owes 47 million US dollars via Stablecoin USDC. These are due because Ver did not fulfill a call during margin trading, according to Lamb. But Ver himself sees the situation quite differently and says via Twitter that rumors about debts owed by him are inaccurate. In reality, the other side, i.e. CoinFLEX, owes him “a substantial amount of money.”
Which of the two sides is now closer to the truth may only be decided in court. Lamb for CoinFLEX writes that Ver has always met all margin trading obligations in the past. But during the crypto market turmoil of recent weeks, high liabilities may have built up quickly when trading with leverage, observers say. However, Ver himself has been an investor in CoinFLEX and is likely to have a (trader) contract with the platform tailored to him, the contents of which are not yet known. Ver has also been an investor in Bitcoin.com, Kraken and other notable projects, and is likely to have gotten rich from them. So it cannot be ruled out that Ver’s financial claims to CoinFLEX have substance.
CoinFLEX plans new token to become solvent again
CoinFLEX hopes to find a short-term way out of the crisis by issuing a new token called Recovery Value USD (rvUSD). This is intended to represent outstanding debt, raise $47 million and carry a 20 percent annual interest rate, according to the RFP. The Recovery Value USD offering is aimed exclusively at wealthy high-income earners and the minimum deposit is $100,000. In a notice to all customers, CoinFLEX puts resumption of payouts in sight if rvUSD is fully subscribed. The “rv” in the name may well be understood as an allusion to the initials of Roger Ver, smirk observers.
Conclusion: CoinFLEX further examples of crypto project in trouble
Since the crash of the algorithmic stablecoin UST at Terra (LUNA) in early May, the chain of news does not break from crypto projects in deep trouble. The trading platform Celsius, for example, also had to stop payouts, the hedge fund Three Arrows Capital (3AC) seems to be insolvent, there is crisis mood at Solend, Julian Hosp’s DeFiChain project floundered – the list could be continued. CoinFLEX shows how, when markets collapsed, a single large investor presumably caused the entire business model to topple. These experiences will be a reminder to the crypto industry for a long time to come, regardless of whether a rescue succeeds in individual cases.