Roger Ver gave his take on the CoinFLEX situation during the latest Bitcoin Cash Hangout session.
Sadly, for everyone affected, Ver could not offer new information, saying legal agreements prevent him from saying more at this time.
Catch up on the goings-on at Coinflex
On June 24, crypto exchange CoinFLEX announced it was pausing user withdrawals “due to extreme market conditions,” and “continued uncertainty involving a counterparty.”
Later, the counterparty mentioned in the statement turned out to be Bitcoin Cash (BCH) proponent Ver. CoinFLEX CEO Mark Lamb alleged that Ver, who is an investor in the company, owes the exchange $47 million in USDC.
The debt is said to relate to Ver’s CoinFLEX account, which went into negative equity. Under normal circumstances, service providers automatically liquidate the position. However, CoinFLEX stated they have an agreement with Ver to keep positions open, which led to mounting losses as prices tumbled.
Backing this agreement were “stringent personal guarantees,” Lamb said Ver had, in the past, always topped up margin calls in accordance with the agreement.
Ver denied the allegations and turned the tables on CoinFLEX, saying the company owes him “a substantial sum of money.”
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
To reinstate withdrawals, Lamb proposed the “recovery value USD” (rvUSD) token, which represents the tokenization of the $47 million blackhole.
Speaking to Bloomberg, the CoinFLEX CEO described it as a possible solution to getting withdrawals reinstated quickly.
“Right now we can’t have withdrawals, there are lots of different ways of solving these problems in crypto finance, and crypto is on the cutting edge of finance.”
With CoinFLEX withdrawals on pause, another issue that has come to light is the knock-on implications to do with Smart Bitcoin Cash, also known as SmartBCH.
SmartBCH is an Ethereum EVM and Web3 compatible sidechain operated via CoinFLEX, which provides the bridge between the BCH mainchain and Smart BCH sidechain.
Should CoinFLEX go under, the BCH locked in SmartBCH may be sold off to cover outstanding debts, potentially spelling the end of the sidechain.
What’s the latest from Ver
Speaking on the latest Bitcoin Cash Hangout, aired on July 3, Ver reiterated that he owes “no debt to CoinFLEX,” and that the embattled crypto exchange owes him money.
“my statement is probably going to be a bit disappointing to the people that are on the call here, but due to the lawyers that have already been involved in the legal complexities there, all I can say at the moment is I have no debt to CoinFLEX.”
Justifying his “disappointing” response, Ver cited the involvement of lawyers and a confidentiality agreement in place, which he intends to keep.
Ver added that he is looking forward to the “full and complete and entire truth” of the situation coming out as soon as possible.
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