CoinFLEX Rips Roger Vers: 'He Was Wasting Time'

Beleaguered crypto exchange CoinFLEX took aim at Roger Ver on Saturday, accusing him of “wasting time” over a broken promise to send the company funds.

Company CEO Mark Lamb blamed Ver last month for the company’s financial trouble, saying he defaulted on a $47 million loan. But in a Saturday blog post, Lamb and co-founder Sudhu Arumugam said the real figure was much higher, writing, “The first estimate of $47m which we communicated did not include the significant loss in liquidating his significant FLEX coin positions. Now that we have found a bid for that size, the liquidations have created a final deficit of $84m for the account.”

They added: “The individual first asked us to liquidate his account, but then continued to tell us for some considerable time afterward that he wanted to send significant funds to the exchange to take physical delivery of the futures positions. It is clear to us now that he was wasting time and hoping for a bounce in the market that never materialized. We tried to liquidate his account in a prudent manner using counterparts on the exchange but as the positions were so significant, they involved slippage as any large or series of large orders would reasonably create.”

The company froze customer accounts on June 23, saying it was the result of “a long-time customer of CoinFLEX’s” whose account “went into negative equity.” Lamb, writing on Twitter later in the week, said he “felt the need to clarify” that the debt was “100 percent related” to Ver, who denied the claim. Ver has published a handful of messages on Twitter since that time but has declined to further address CoinFLEX.

CoinFLEX created a new cryptocurrency called rvUSD — which they said stood for “Recovery Value,” not Roger Ver — in hopes of selling it to investors who would cover Ver’s debt. But the company missed a self-imposed June 30 deadline of raising enough capital to release customer funds. Lamb said in an interview at the time he didn’t “know what’s going to happen after if [Ver] doesn’t repay or if he does repay.”

Lamb and Arumugam said in Saturday’s post that they were seeking a judgment against Ver in the Hong Kong International Arbitration Centre, but estimated it would take a year to reach a settlement.

“We have commenced arbitration in HKIAC for the recovery of this $84m as the individual had a legal obligation under the agreement to pay and has refused to do so,” the duo said. “His liability to pay is a personal liability which means the individual is personally liable to pay the total amount, so our lawyers are very confident that we can enforce the award against him. The arbitration process is not a quick process and we estimate that it will take approximately 12 months prior to getting a judgment in Hong Kong. Thereafter, we will be able to enforce that judgment against his worldwide assets.”

However, they said the company would “be looking” to make 10 percent of customers’ assets available within a week, “and more later.”

“One of the main reasons for our lack of responsiveness in the last two weeks is that we have been looking for companies/partners to invest in CoinFLEX and have often been under [non-disclosure agreements] with them,” they added. “We aim to be as transparent as possible in this post and going forwards.”