Thursday, September 21, 2023

CoinFlex Claims Roger Ver’s $47 Million Debt Caused Withdrawals to Shut Down

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Shreya Christina
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One of the difficulties of cryptocurrency is figuring out who to believe. Example: The conflict between Mark Lamb, CEO of CoinFlex, and Roger “Bitcoin Jesus” Ver, an early Bitcoin investor. Lamb says Ver owes his company $47 million and is why the company froze customer withdrawals last week. Far denies this and says CoinFlex is in fact owed it money.

CoinFlex, an exchange, froze withdrawals on June 27, saying it would restart withdrawals on June 30 with one condition: CoinFlex must sell tokens related to a debt of a “certain high-net-worth individual”. (The company did not initially name Ver.)

Eleven days ago, we pointed out a few crypto companies with issues that could cause further ripples across the industry and noted that things could get worse. Well, things have gotten worse. The uncertainty about crypto has reached a point where: The Wall Street Journal reports hedge funds have started betting hundreds of millions of dollars that Tether will fall – which is strange, because Tether, as a stable currency, theoretically has a fixed value of $1. Paolo Ardoino, the CTO of both Tether and crypto exchange Bitfinex, the so-called short-selling attempts a coordinated attack to go along with “a new wave of FUD”.

Since then, Three Arrows Capital has also been named in default on loans worth about $670 million, the Celsius Network still doesn’t have a timeline to restore withdrawals, and Babel Finance said it “has reached preliminary agreements on the repayment period of some debts. “

Ver’s alleged involvement here underscores the connections between cryptocurrency enthusiasts, exchanges and lending platforms. Ver early invested in Bitcoin and related startups like BitPay before advocating for Bitcoin Cash as it emerged from a fork in the blockchain.

CoinFlex’s tokens, called rvUSD, promise an APR of 20 percent, which is very high. (That seemed incredible even before Ver denied he owed anything.) They are not available to investors in the US. Still, the token – the “rv” in rvUSD in theory for “recovery value” seems to refer to its initials.

“In particular, the individual had consistently complied with every margin call before this incident,” the newspaper says:† It referred to this individual as a “high integrity individual of considerable resources, experiencing temporary liquidity problems as a result of a credit (and price) crunch in crypto markets (and even non-crypto markets) who owns significant shares in several private unicorn companies and a large portfolio.”

Interested parties must purchase and pay a minimum of $100,000 for rvUSD in USDC. People who own rvUSD can theoretically convert to USDC, another stablecoin worth a dollar, as the debt is repaid. Okay, but what if it’s not refunded? Then, in October 2023, investors will be paid USDC from CoinFlex’s balance sheet or in a mix of USDC and Flex coins, which CoinFlex Calls “the cornerstone of the CoinFlex ecosystem.”

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