The notorious Roger Ver is again within the headlines for all of the improper causes. Like many gamers within the trade, the derivatives trade CoinFLEX not too long ago bumped into monetary bother. Surprisingly, they blamed all of it on Roger Ver and the circus began. Fortunately for us, Chinese journalist Colin Wu covered “all the insider particulars by a supply near the scenario” in his e-newsletter. Nonetheless, as you possibly can see, it’s an nameless supply. So, take the story we’re about to research with a grain of salt.
The abstract of the scenario in keeping with Wu:
“On June 24, 2022, the trade CoinFLEX introduced that it made the choice to halt person withdraws, and the worth of the platform Token FLEX subsequently plummeted, from $4.30 to lower than $1.50 in 4 hours. On the similar time, FlexUSD, the platform’s stablecoin, additionally started to de-peg, with costs dropping as little as $0.23.”
The humorous factor is that each entities have been clearly in enterprise collectively. On Could 14th, Roger Ver tweeted, “Curiosity paying FlexUSD by CoinFLEX is on its method to being the default secure coin for the entire SmartBCH ecosystem if USDT & USDC don’t transfer rapidly.” How did all the things deteriorate so quick? That’s what this text’s about.
— Roger Ver (@rogerkver) May 14, 2022
Roger Ver Vs. CoinFLEX, The Play By Play
The story begins with CoinFLEX saying to their companions that they “opened a particular account for Roger Ver.” The account’s traits assured that Roger Ver “wouldn’t be liquidated instantly if it fell beneath the upkeep margin, however reasonably that he could be given adequate time to make a margin name.” Nothing particular right here, the person is a high-net-worth particular person, offers like this are a dime a dozen in excessive finance.
As a assure, Roger Ver supplied “a margin of BCH,” valued “at round $400.” Then, the Terra collapse occurred and the entire crypto market crashed. By the point CoinFLEX ”confronted a liquidity disaster,” Bitcoin Money was value round $120. It’s nonetheless at that worth vary on the time of writing. That is the place issues get insane. The largest revelation of Wu’s story is on the finish of this paragraph.
“If that have been all, CoinFLEX would have been in a position to cowl its shortfall. Nonetheless, previous to this, CoinFLEX had issued its personal stablecoin, FlexUSD, like different exchanges. At this level, CoinFLEX used FlexUSD to purchase a considerable amount of FLEX from the secondary market and opened quick place to hedge the spot worth. Nonetheless, the counterparty to this quick place was additionally Roger Ver!”
As we’ve seen occur repeatedly, “when the withdrawal restriction announcement was made, CoinFLEX’s whole funds started to fall in a cyclical trend.” And all hell broke unfastened.
BCH worth chart on Coinbase | Supply: BCH/USD on TradingView.com
An All-Out Twitter Warfare
On June twenty seventh, the corporate’s CEO Mark Lamb tweeted, “CoinFLEX made the choice to halt person withdrawals on June 23, shortly after a long-time buyer of CoinFLEX went into adverse fairness. ” Instantly after, the rumor that Roger Ver was that “long-time buyer” started circulating.
Not too long ago some rumors have been
spreading that I’ve defaulted on a
debt to a counter-party. These rumors
are false. Not solely do I not have a debt
to this counter-party, however this counter-
occasion owes me a considerable sum of
cash, and I’m at present in search of the
return of my funds.
— Roger Ver (@rogerkver) June 28, 2022
The Bitcoin Money chief went on the offensive and tweeted an announcement clearly written by a lawyer. “Not too long ago some rumors have been spreading that I’ve defaulted on a debt to a counter-party. These rumors are false. Not solely do I not have a debt to this counter-party, however this counter-party owes me a considerable sum of cash, and I’m at present in search of the return of my funds.” How might these two statements be true? Keep in mind that “the counterparty to this quick place was additionally Roger Ver!”
He had an extended observe file of beforehand topping up margin and assembly margin necessities in accordance with this settlement. Now we have been chatting with him on calls steadily about this example with the purpose of resolving it. We nonetheless want to resolve it.
— Mark Lamb 💪 (@MarkDavidLamb) June 28, 2022
Nonetheless, Mark Lamb was not having it. Regardless that each events have been negotiating, Lamb took to Twitter and said, “CoinFLEX additionally categorically denies that we’ve got any money owed owing to him.” Plus, “Roger Ver owes CoinFLEX $47 Million USDC. Now we have a written contract with him obligating him to personally assure any adverse fairness on his CoinFLEX account and high up margin recurrently.”
Even when CoinFLEX is correct on this occasion, did they must air their soiled laundry in public?
Roger Ver Vs. CoinFLEX, The Aftermath
Again to Colin Wu’s e-newsletter:
“In the long run, Roger Ver’s place was utterly worn out and become adverse fairness, whereas CoinFLEX was left with numerous delisting FLEX. It was revealed that CoinFLEX had an actual lack of $120 million, together with losses from the de-peg of the stablecoin FlexUSD and the lack of withdrawals (lower than $10 million) as a result of collapse of the SmartBCH cross-chain bridge, which was constructed by CoinFLEX.”
And the very fact of the matter is that, even when Roger Ver’s debt induced this, CoinFLEX’s danger administration staff has just a few inquiries to reply. “Roger Ver turned virtually the one counterparty to the trade, and this solely counterparty had the privilege of not replenishing the margin in time,” Wu concludes. It was an unlucky sequence of occasions, however each events signed these offers and each events took to Twitter to resolve what ought to’ve been a personal matter.
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