Without mentioning CoinFLEX by name, Roger Ver said that he had not “defaulted on a debt to a counterparty,” claiming that the platform owed him “a significant sum of money”.
Roger Ver, an early Bitcoin investor and proponent of Bitcoin Cash, has responded to allegations from crypto investment platform CoinFLEX regarding alleged $47 million in debt.
In a tweet on Tuesday, Ver – without mentioning CoinFLEX by name – said it had not “defaulted on a debt to a counterparty,” and claimed the firm owed it “a substantial sum of money.” The denial followed rumors on social media that the BCH advocate was involved in the platform halting withdrawals due to “a high-net-worth client who has stakes in many large cryptocurrency firms” failing to cover his debts.
CoinFLEX CEO Responds via Twitter
CoinFLEX CEO Mark Lamb took to Twitter shortly after the release to claim that the company had a written contract with Ver “requiring him to personally guarantee any negative balance in his CoinFLEX account and replenish margin regularly.” Lamb posted on Twitter that, “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.”
“It is unfortunate that Roger Ver has to resort to these kinds of tactics to divert attention from his responsibilities,” said CoinFLEX CEO.
Report on a CoinFLEX Account Losses
Cointelegraph reported on Tuesday that a CoinFLEX account – owned by a “high-integrity and wealthy person” – incurred $47 million in losses after it was allowed to reach a negative balance without being liquidated. The platform planned to fix its liquidity shortage by issuing a new token, Recovery Value USD (rvUSD), starting June 28, with user withdrawals expected to resume on June 30.
The price of FLEX, the native token of CoinFLEX, has fallen by more than 84% in the last 30 days, from $1.19 to $0.80 following statements by Lamb and Ver on Twitter.
CoinFLEX Plans
It is worth noting that Crypto investment platform CoinFLEX aims to remedy its liquidity shortage and resume user withdrawals by selling bad debt through a new $47 million token offering.
Under normal circumstances, the crypto lender liquidates the accounts before they reach zero. However, Lamb explained that in this case, CoinFLEX opened a one-of-a-kind “unliquidated recourse account,” in which it agreed not to liquidate the account, and the borrower agreed to keep it filled with plenty of capital.
Things did not go according to plan, as the account went negative, which supposedly caused a liquidity crisis in the company. Lamb added that this account was the only one on CoinFLEX with negative equity.
To prevent this from happening again, Lamb stated that it will no longer issue unliquidated recourse accounts. His company will also enhance its transparency by making the US dollar notional value of each account’s futures positions public, through a third-party audit firm.
By Audy Castaneda
