September 24, 2022

CoinFlex Claims ‘Bitcoin Jesus’ Responsible for $47 Million Debt

bitcoin

The latest scandal to come to light amidst the crash in the crypto market involves digital asset exchange CoinFlex. The exchange and Roger Ver, a long-time crypto investor, have been embroiled in a rather public battle over a debt worth $47 million.

Exchange blames Bitcoin Jesus

In the early days of the industry, the term ‘Bitcoin Jesus’ had been used to refer to Roger Ver because of the evangelical views he had about crypto. Mark Lamb, the chief executive of CoinFlex, named him on Tuesday as the investor who had not paid the $47 million debt of the stablecoin USDC, which was part of a margin call.

The stablecoin in question is pegged to the value of the US dollar one-on-one. A margin call refers to a situation when more funds have to be committed by an investor in order to avoid losses on trades that have been made with borrowed funds.

CoinFlex’s troubles

Last week, CoinFlex announced that it was pausing withdrawals for its customers. On Monday, the CEO of the crypto exchange disclosed that the account of an investor had gone into ‘negative equity’. Typically, it is the norm to liquidate the positions of the investor automatically in such a situation. However, the problem here was that the investor had signed an agreement with the exchange, due to which this could not happen.

CoinFlex disclosed that the investor asked that his positions not be liquidated and had made personal guarantees around margin calls and account equity. Lamb did not name the investor when he disclosed this information, but they decided to reveal his identity on Tuesday. The CEO also disclosed that a notice of default had also been served to the investor.

Lamb disclosed that Ver had a history of topping up margin and always met margin requirements as per their agreement. Therefore, they had been talking to him about this situation on calls in order to resolve the issue. The CEO stated that they still wanted to do so.

Ver denies

In response, Ver stated that he was not the investor, as there was a counterparty that owed him and was seeking a return of his money. According to CoinFlex, the debts are related to Ver’s account. They have clarified that they do not owe him anything. Lamb stated that Roger Ver was not being honest and it was unfortunate that he was using such tactics for deflecting from his responsibilities and liabilities.

Ver has had an active role in the crypto industry for over a decade and has had a hand in projects like Blockchain.com and Bitcoin.com. As for CoinFlex, the exchange announced on Monday that they were launching a new coin known as Recovery Value USD, or rvUSD, which would help in raising the $47 million funds they had lost. In order to lure in investors, the exchange is offering people 20% interest on the coin. This is the latest drama to happen in the crypto industry due to the decline in prices.

Leave a Reply

Your email address will not be published.