The infamous Roger Ver is back in the headlines for all the wrong reasons. Like many players in the industry, the derivatives exchange CoinFLEX recently ran into financial trouble. Surprisingly, they blamed it all on Roger Ver and the circus started. Luckily for us, Chinese journalist Colin Wu covered “the entire insider details through a source close to the situation” in his newsletter. However, as you can see, it’s an anonymous source. So, take everything we’re about to analyze with a grain of salt.
The summary of the situation according to Wu:
“On June 24, 2022, the exchange CoinFLEX announced that it made the decision to halt user withdraws, and the price of the platform Token FLEX subsequently plummeted, from $4.30 to less than $1.50 in four hours. At the same time, FlexUSD, the platform’s stablecoin, also began to de-peg, with prices dropping as low as $0.23.”
The funny thing is that both entities were clearly in business together. On May 14th, Roger Ver tweeted, “Interest paying FlexUSD by CoinFLEX is on its way to being the default stable coin for the whole SmartBCH ecosystem if USDT & USDC don’t move quickly.” How did everything deteriorate so fast? That’s what this article’s about.
Interest paying #FlexUSD by @CoinFLEXdotcom is on its way to being the default stable coin for the whole @SmartBCH ecosystem if #USDT & #USDC don’t move quickly.https://t.co/HG14Ik6U0o
— Roger Ver (@rogerkver) May 14, 2022
Roger Ver Vs. CoinFLEX, The Play By Play
The story starts with CoinFLEX announcing to their partners that they “opened a special account for Roger Ver.” The account’s characteristics guaranteed that Roger Ver “would not be liquidated immediately if it fell below the maintenance margin, but rather that he would be given sufficient time to make a margin call.” Nothing special here, the man is a high-net-worth individual, deals like this are a dime a dozen in high finance.
As a guarantee, Roger Ver offered “a margin of BCH,” valued “at around $400.” Then, the Terra collapse happened and the whole crypto market crashed. By the time CoinFLEX ”faced a liquidity crisis,” Bitcoin Cash was worth around $120. It’s still at that price range at the time of writing. This is where things get insane. The biggest revelation of Wu’s story is at the end of this paragraph.
“If that were all, CoinFLEX would have been able to cover its shortfall. However, prior to this, CoinFLEX had issued its own…
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