Technology
Wednesday, June 29th, 2022 6:46 am EDT
Digital asset exchange CoinFlex is locked in a public battle with long-time cryptocurrency investor Roger Ver over a $47 million debt, reflecting the latest saga to unfold amid the market crash.
On Tuesday, CoinFlex CEO Mark Lamb named Roger Ver, who earned the nickname “Bitcoin Jesus” for his evangelical views early on in the industry, as the investor who failed to pay $47 million of stablecoin USDC as part of a margin call.
USDC is a stablecoin pegged one-to-one with the U.S. dollar. A margin call is a situation in which an investor has to commit more funds to avoid losses on a trade made with borrowed cash.
CoinFlex paused withdrawals for customers last week. Lamb revealed on Monday that an individual investor’s account went into “negative equity.” The company would typically automatically liquidate that investor’s positions. But this particular investor had an agreement with CoinFlex that did not allow this to happen.
In return, the investor had pledged “stringent personal guarantees around account equity and margin calls in exchange for not being liquidated,” CoinFlex said.
At the time Lamb did not name the investor. But on Tuesday, the CoinFlex CEO claimed it was Ver who owed the company money. Lamb said Ver has been served with a notice of default.
“He had a long track record of previously topping up margin and meeting margin requirements in accordance with this agreement. We have been speaking to him on calls frequently about this situation with the aim of resolving it. We still would like to resolve it,” Lamb said in a tweet.
But Ver denied that he is the investor behind the debt. Ver said that a counterparty owes him “a substantial sum of money” and that he is currently “seeking the return” of his funds.
CoinFlex’s Lamb said the debt is “100% related” to Ver’s account and said the company “denies that we have any debts owing” to Ver.
“His statement is blatantly false. It is unfortunate that Roger Ver needs to resort to such tactics in order to deflect from his liabilities and responsibilities,” Lamb said.
Ver has been active in the cryptocurrency industry for more than a decade, investing in several businesses and co-founded Bitcoin.com and Blockchain.com.
On Monday, CoinFlex announced plans to issue a new coin called Recovery Value USD, or rvUSD in order to raise the $47 million shortfall. The company is offering 20% interest on the coin to entice investors.
The CoinFlex-Ver saga is the latest drama to unfold as a result of a slump in cryptocurrency prices over the past few weeks that has wiped billions of dollars of value off of the market in a period being dubbed a new “crypto winter.”
Three Arrows Capital, a hedge fund investing in digital assets, has plunged into liquidation, CNBC reported on Wednesday. Meanwhile, a number of companies including lending firm Celsius are facing a liquidity crisis and crypto firms have gone through layoffs.
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