- Roger Ver has been identified as the $47 million Coinflex defaulter
- Ver took out a huge leveraged position in BCH which reversed, leaving him owing the company
- The Coinflex shareholder denied the allegations but Coinflex confirmed it had a contract with him for such services
Roger Ver has sensationally been outed as the defaulter on the Coinflex platform which has caused the company to try and raise $47 million through an ad-hoc token sale, despite being a shareholder in the company. Rumours began to swirl around the crypto space that Ver was the man who owes the company $47 million, with Ver taking to Twitter to flatly deny the allegations, and in fact claim that Coinflex owes him money. Coinflex CEO Mark Lamb took the extraordinary step yesterday of publicly outing Ver as the Coinflex defaulter, putting Ver in an even more awkward position.
Coinflex Forced to Cover Ver Debt With rvUSD Token
Coinflex announced last week that a mystery user had put them in a very precarious financial position, holding out on a $47 million repayment to top up his margin account. The problem has become so severe that Coinflex this week had to resort to issuing a new token, rvUSD, the sale of which it hoped would plug the gap and allow it to resume the withdrawals it was forced to suspend last week.
Coinflex was very careful to keep Ver’s identity under wraps, calling him only a “high integrity person of significant means”, but it didn’t take long for the guessing game to start:
A verified insider has confirmed that the “high net worth individual” who owes CoinFLEX money is Bitcoin Cash advocate & CoinFLEX shareholder Roger Ver. Ver had a long on BCH, and the platform allowed him to run a deficit because he personally guaranteed he would pay them back. https://t.co/0lyETbH0PD
— FatMan (@FatManTerra) June 28, 2022
Ver clearly got hold of this tweet and didn’t like what he saw, responding in kind:
Recently some rumors have been
spreading that I have defaulted on a
debt to a counter-party. These rumors
are false. Not only do I not have a debt
to this counter-party, but this counter-
party owes me a substantial sum of
money, and I am currently seeking the
return of my funds.
— Roger Ver (@rogerkver) June 28, 2022
Less than an hour after this tweet however, Coinflex CEO Mark Lamb ripped away the facade and let its famous shareholder have it with both barrels:
Roger Ver owes CoinFLEX $47 Million USDC. We have a written contract with him obligating him to personally guarantee any negative equity on his CoinFLEX account and top up margin regularly. He has been in default of this agreement and we have served a notice of default.
— Mark Lamb 💪 (@MarkDavidLamb) June 28, 2022
Lamb claimed that the company had spoken to Ver on several occasions in order to try and resolve the debt, but that Ver had denied the debt was his. Lamb argued that the debt is “100% related to his account” and that Ver’s argument that Coinflex in fact owes him money is “blatantly false”. Lamb added that it was “unfortunate that Roger Ver needs to resort to such tactics in order to deflect from his liabilities and responsibilities.”
Ver Took Leverage Position in Bitcoin Cash
Ver has yet to respond to this latest tweet, with the matter now hopefully being dealt with privately, but unfortunately for Ver, many the crypto community has taken Coinflex’s side, with some even mocking the way his tweet was presented:
lmfao at copy pasting this in directly from your lawyer without fixing the formatting.
— correction konata (@cryptokonata) June 28, 2022
It seems that the $47 million owed to Coinflex is because of a series of leveraged longs Ver took out on his baby Bitcoin Cash, only to see it plummet enough to take out the 2019 lows:
Assuming Coinflex is correct in saying it has a written contract that Ver is now in breach of, it leaves both in a perilous position. Ver is of course on the hook for $47 million it seems he just doesn’t have, which means that Coinflex is going to have to go down the arduous legal route in order to try and get it back
However, if it can’t raise the $47 million that Ver owes the company, which let’s not forget is a position it got itself into of its own volition, then it might have to fold anyway, potentially letting Ver off the hook and seeing Coinflex sued by its own users if they lose their funds.
Everybody Loses if the Debt Isn’t Funded
The entire situation is now balanced on a knife edge, and whatever the outcome, Ver’s reputation has been forever tarred. The only hope now is that Coinflex can raise the money it needs to ensure that it can honour customers’ withdrawals.
And you can bet your life that they will withdraw, knowing that the risk management of the company extends to lending individuals a nearly $50 million line of credit that, were it not paid back, could ultimately bring the platform to its knees.