Katherine Ross

Mark Lamb, co-founder of CoinFLEX, posted an open letter to “Bitcoin Jesus” Roger Ver and Blockchain.com CEO Peter Smith.&nbsp;



The letter extends an “olive branch” to Ver and Smith to celebrate Lamb’s launch of Open Exchange, which is a claims exchange rebranded from CoinFLEX and co-founded by Su Zhu and Kyle Davies, formerly of the bankrupt Three Arrows Capital.&nbsp;



Zhu, in a tweet thread from February, <a href="https://twitter.com/zhusu/status/1623734703596486658" target="_blank" rel="noreferrer noopener">claimed</a> that he and Davies wanted to use the “pain” and “lessons” from the collapse of Three Arrows, which led them to Open Exchange.



Lamb and Ver have been locked in a <a href="https://blockworks.co/news/coinflex-ceo-files-default-notice-against-bitcoiner-roger-ver" target="_blank" rel="noreferrer noopener">feud</a> since Lamb initially accused Ver of owing CoinFLEX $47 million in USDC, a stablecoin, in June 2022. Ver pushed back against the claims, alleging that CoinFLEX <a href="https://twitter.com/rogerkver/status/1541822377461415936" target="_blank" rel="noreferrer noopener">owed</a> him “a substantial sum of money.”&nbsp;



In July of last year, CoinFLEX claimed that the sum owed to them by a single investor, identified by Lamb as Ver, totaled $84 million.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">An Open Letter to <a href="https://twitter.com/rogerkver?ref_src=twsrc%5Etfw">@rogerkver</a> And <a href="https://twitter.com/OneMorePeter?ref_src=twsrc%5Etfw">@OneMorePeter</a> of <a href="https://twitter.com/blockchain?ref_src=twsrc%5Etfw">@blockchain</a>: A Pathway to Wholeness <a href="https://t.co/9tMDAlnjHS">pic.twitter.com/9tMDAlnjHS</a>&mdash; Mark Lamb 💪 (@MarkDavidLamb) <a href="https://twitter.com/MarkDavidLamb/status/1643334856540057603?ref_src=twsrc%5Etfw">April 4, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Lamb claimed that a “large individual customer” had a manual margin arrangement with CoinFLEX, which allowed for a grace period to offer more collateral instead of an automatic liquidation, which is what happened for the average user.&nbsp;



“The customer’s privilege came with a requirement that the customer personally indemnifies us for shortfalls in his account following the liquidation of his positions,” Lamb and co-founder Sudhu Arumugam <a href="https://coinflex.com/blog/coinflex-update-july-9-2022" target="_blank" rel="noreferrer noopener">wrote</a> in a blog post last July. 



Following the $84 million in losses, CoinFLEX filed for a restructuring in a Seychelles court last August, which was approved. From there, Lamb, Zhu and Davies joined forces to create OPNX from the bones of CoinFLEX.&nbsp;



The olive branch proposed by Lamb does not wipe the debts, however, as Lamb asked for a “payment plan.” He added “these ordinary people deserve a resolution.” OPNX is tokenizing rvUSD to allow them to achieve liquidity. The firm also offers markets for FTX claims.



As for Smith, Lamb is asking for Blockchain.com’s Cayman entity to return the three million FLEX ($5.9 million) owed to CoinFLEX in return for an equity stake in Open Exchange.&nbsp;



Blockchain.com, Lamb and Ver did not immediately respond to Blockworks request for comment.&nbsp;



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

CoinFLEX

CoinFLEX CEO Offers ‘Olive Branch’ to Roger Ver Over $84M Debt

Bessie Liu

<div id="highlights-block_62bcc63f483e7" class="highlights">
 <ul>
 <li>After failing to receive $47 million in USDC funds from ​​“Bitcoin Jesus,” CoinFLEX has turned toward a “recovery” token</li>
 <li>Recovery Value USD (rvUSD) will offer a 20% annual return for holders</li>
 </ul>
 
</div>



After CoinFLEX’s chief executive accused early Bitcoin adopter Roger Ver of owing the company $47 million in the stablecoin USDC, the head of the exchange told Blockworks he’s shifted to focus on recovering the funds he says are owed.&nbsp;



CEO Mark Lamb <a href="https://twitter.com/MarkDavidLamb/status/1541831697787928576" target="_blank" rel="noreferrer noopener">tweeted</a> Tuesday that Ver — who is well-known for backing growing Bitcoin-focused startups — has been a longtime customer and <a href="https://cms.blockworks.co/coinflex-ceo-confirms-roger-ver-owes-the-company-47m/" target="_blank" rel="noreferrer noopener">failed to meet</a> a recent margin call. 



Ver has denied the claims instead alleging the company owes him money.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Recently some rumors have been spreading that I have defaulted on a debt to a counter-party. These rumors are false. Not only do I not have a debt to this counter-party, but this counter- party owes me a substantial sum of money, and I am currently seeking the return of my funds.&mdash; Roger Ver (@rogerkver) <a href="https://twitter.com/rogerkver/status/1541822377461415936?ref_src=twsrc%5Etfw">June 28, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Ver told Blockworks via Telegram he still stands behind his tweet posted on Tuesday and that a statement from his lawyers would be issued sometime on Thursday.



CoinFLEX, an exchange incorporated in the Republic of Seychelles, halted customer withdrawals of funds last week and issued a token named Recovery Value USD (rvUSD) that offers a 20% annual return in hopes of raising funds to stabilize the business. 



“We are still speaking to [Ver], and we have filed a default notice,” Lamb said.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“We&#8217;ll do whatever it takes to get these funds back.”&nbsp;</blockquote>



Lamb is now speaking with a number of distressed debt funds and other institutional investors, saying “there is a large amount of precedent for these types of transactions.”



“Fast and swift transactions by this nature [are in] the best interest of our customers,” he said. “We want to get customers fully capitalized and withdraw their funds as quickly as possible,” Lamb said. “The amount of interest we&#8217;ve seen from that industry, debt credit and distressed debt is enormous. We are continuing to speak to various participants in that industry.”



Lamb and Ver first met some 10 ten years ago and have had what Lamb describes as a “personal recourse, non-liquidation relationship.”



The takeaway, from CoinFLEX’s perspective: the exchange is unable to get its lent money back and Ver is personally liable for any loans or assets he can’t repay soon.



Lamb declined to comment on whether the rvUSD token plan has been run by the <a href="https://fsaseychelles.sc/" target="_blank" rel="noreferrer noopener">Financial Services Authority Seychelles</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

CoinFLEX CEO Files Default Notice Against Bitcoiner Roger Ver

<div id="highlights-block_62bb5c8981b98" class="highlights">
 <ul>
 <li>After halting withdrawals last week, CoinFLEX announced it would launch a new token to raise $47 million</li>
 <li>Ver denies that he is the debtor and says CoinFLEX owes him a substantial amount of money</li>
 </ul>
 
</div>



The chief executive of CoinFLEX alleged Tuesday that the former CEO of crypto trading platform and wallet provider <a href="http://bitcoin.com/" target="_blank" rel="noreferrer noopener">Bitcoin.com</a> owes the cryptocurrency exchange $47 million.



CoinFLEX CEO Mark Lamb <a href="https://twitter.com/MarkDavidLamb/status/1541831697787928576" target="_blank" rel="noreferrer noopener">tweeted</a> that Roger Ver, current executive chairman of Bitcoin.com, is a longtime customer and the counterparty whose outstanding debt forced the derivatives-focused exchange to halt withdrawals last week. The company on Monday moved to <a href="https://cms.blockworks.co/coinflex-plans-to-raise-missing-funds-with-new-token/" target="_blank" rel="noreferrer noopener">issue a new token</a>, rvUSD, to stabilize its balance sheet, with the goal of raising at least $47 million. 



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Roger Ver owes CoinFLEX $47 Million USDC. We have a written contract with him obligating him to personally guarantee any negative equity on his CoinFLEX account and top up margin regularly. He has been in default of this agreement and we have served a notice of default.&mdash; Mark Lamb 💪 (@MarkDavidLamb) <a href="https://twitter.com/MarkDavidLamb/status/1541831697787928576?ref_src=twsrc%5Etfw">June 28, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Lamb told Bloomberg rvUSD will have a 20% yield, and — if $47 million is raised — users would be able to withdraw their funds in full.&nbsp;



After being suspected as the debtor by the anonymous crypto market participant <a href="https://twitter.com/FatManTerra/status/1541778973511884802" target="_blank" rel="noreferrer noopener">FatManTerra</a>, Ver initially denied.



“Not only do I not have a debt to this counter party, but this counter party owes me a substantial amount of money,” Ver said at the time.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">While the debtor is pasting scripted rebuttals from his lawyer and the creditor claims they&#39;re in convo to resolve it while launching a questionable &quot;product&quot; to fill the gap. Disgraceful.<a href="https://t.co/sbTYQ7c0Gt">https://t.co/sbTYQ7c0Gt</a> <a href="https://t.co/Oyo11lHOxD">pic.twitter.com/Oyo11lHOxD</a>&mdash; DeFiyst (@DeFiyst) <a href="https://twitter.com/DeFiyst/status/1541837986626768896?ref_src=twsrc%5Etfw">June 28, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



In defense of CoinFLEX, Lamb tweeted that “[Ver] is denying that the debt pertains to him and so we felt the need to clarify to the public that yes — the debt is 100% related to his account.”



He added that his company does not owe any debts to Ver, and that “his statement is blatantly false.”



Ver has been a proponent of a 2017 bitcoin fork, <a href="https://www.blockworksresearch.com/assets/bch/" target="_blank" rel="noreferrer noopener">Bitcoin Cash (BCH)</a>, which was later <a href="https://www.investopedia.com/terms/b/bitcoin-cash.asp" target="_blank" rel="noreferrer noopener">split again</a> into Bitcoin Cash ABC (remaining known as BCH) and Bitcoin Cash Satoshi&#8217;s Vision (BSV) the brainchild of <a href="https://cms.blockworks.co/?s=craig+wright" target="_blank" rel="noreferrer noopener">Craig Wright</a>. Despite neither fork being embraced by the market as the canonical bitcoin, they currently rank at number 32 and 49 by market cap, with the cryptoassets together worth about $3 billion, or about 0.7% the value of BTC.



As a bitcoin evangelist, Ver became known as “<a href="https://www.investopedia.com/tech/who-roger-ver-bitcoin-jesus/" target="_blank" rel="noreferrer noopener">Bitcoin Jesus</a>.” He renounced <a href="https://www.bloomberg.com/news/articles/2014-06-15/-bitcoin-jesus-calls-rich-to-tax-free-tropical-paradise" target="_blank" rel="noreferrer noopener">his US citizenship</a> in 2014, <a href="https://youtu.be/kApf5j-clzE?t=37" target="_blank" rel="noreferrer noopener">motivated in part</a> by his experience serving 10 months in federal prison for illegally selling explosives on eBay.



CoinFLEX and Ver did not immediately return requests for comment.



Correction: Roger Ver has served as the executive chairman of Bitcoin.com since Aug. 1, 2022. Dennis Jarvis is the current CEO. Updated June 29, 2022 at 9:00 am ET.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Bitcoin.com

Troubled Exchange CoinFLEX Confirms Bitcoin.com’s Executive Chairman Owes It $47M

Casey Wagner

<div id="highlights-block_62ba28f93922d" class="highlights">
 <ul>
 <li>CoinFLEX hopes to raise $47 million with a new token</li>
 <li>If all funds are raised, customers will be able to withdrawal in full</li>
 </ul>
 
</div>



Four days after suspending withdrawals following an unnamed counterparty’s unmet margin call, cryptocurrency exchange CoinFLEX will be issuing a new token with the hopes of raising $47 million.



“We’re turning a problem into an opportunity,” Mark Lamb, CEO of CoinFLEX said during an interview with Bloomberg Monday.&nbsp;



The token will have a 20% yield, and, if the full amount of $47 million is raised, all CoinFLEX users will be able to withdraw their funds in full, Lamb said.&nbsp;



“There’s other options being made available as well — we’re going to do everything possible to ensure that users funds are made whole and withdrawals enabled,” Lamb wrote in the exchange’s <a href="https://t.me/coinflex_EN" target="_blank" rel="noreferrer noopener">Telegram</a> chat following the interview. 



When asked if there were concerns about a run risk, Lamb said these would be unfounded.&nbsp;



“We’re not worried about that scenario because upon this fundraise being concluded, everyone can withdraw,” Lamb said. “We want everything to be matched, at all times.”&nbsp;



CoinFLEX announced on June 23 that the exchange was <a href="https://cms.blockworks.co/coinflex-halts-withdrawals-citing-uncertainty-around-unnamed-counterparty/" target="_blank" rel="noreferrer noopener">halting all withdrawals</a> and trading of its in-house FLEX token. 



“Due to extreme market conditions last week &amp; continued uncertainty involving a counterparty, today we are announcing that we are pausing all withdrawals,” the exchange <a href="https://coinflex.com/blog/coinflex-update-on-withdrawals/" target="_blank" rel="noreferrer noopener">wrote</a> at the time. “We fully expect to resume withdrawals in a better position as soon as possible.” 



The exchange will also pledge to make leveraged positions more transparent going forward, Lamb said.&nbsp;



“We will be making these positions public, we have an auditing firm we will be working with,” Lamb said. “This is much-needed data, there isn’t a single futures exchange in the world that makes these positions public.”&nbsp;



There’s a balance between transparency and privacy, though, Lamb noted. The exchange will not be revealing the identity of the unnamed counterparty with the unmet margin call at this time.&nbsp;



When asked if CoinFLEX might opt to sell in the event that the token issuance fails to raise the needed $47 million, Lamb responded that this was “possible,” but “we think the business is worth keeping.”&nbsp;



“Plus there’s significant interest in the token, so it’s definitely the best option,” he added.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

CoinFLEX Plans To Raise Missing Funds With New Token

<div id="highlights-block_62b4c14bccc0b" class="highlights">
 <ul>
 <li>CoinFLEX is halting withdrawals until at least June 30, the exchange said</li>
 <li>The unnamed counterparty is not Three Arrows Capital, Celsius or BlockFi, the announcement said</li>
 </ul>
 
</div>



CoinFLEX has suspended all withdrawals in the latest instance of an exchange going offline amid turbulent trading.&nbsp;



Customers can continue to trade and deposit, but no funds can be taken off the platform, the company said in a statement Thursday.&nbsp;



“Due to extreme market conditions last week &amp; continued uncertainty involving a counterparty, today we are announcing that we are pausing all withdrawals,” the exchange <a href="https://coinflex.com/blog/coinflex-update-on-withdrawals/" target="_blank" rel="noreferrer noopener">wrote</a>. “We fully expect to resume withdrawals in a better position as soon as possible.” 



The exchange also halted trading of all of its in-house FLEX tokens.&nbsp;



The unnamed counterparty is not Three Arrows Capital, which is currently facing potential <a href="https://cms.blockworks.co/three-arrows-capital-brink-default-owes-voyager-657m/" target="_blank" rel="noreferrer noopener">insolvency</a>, CoinFLEX said. The firm’s CEO also clarified that the counterparty is not a lending firm, such as Celsius or BlockFi. 



The next update is scheduled to come on June 27, and withdrawals are expected to resume on June 30, the exchange said.



CoinFLEX Telegram members had already been reporting issues with withdrawals for the past few days.



“99.X% of my money is in CoinFLEX right now,” Mark Lamb, CEO of CoinFlex, wrote in the firm’s <a href="https://t.me/coinflex_EN" target="_blank" rel="noreferrer noopener">Telegram channel</a> Thursday. “None of which has been withdrawn.”



The situation highlights ongoing concerns around liquidity as the sell-off in crypto markets continue and companies across the industry start to feel the pressure.&nbsp;



“There is no easy solution, but more robust <a href="https://cms.blockworks.co/wheres-the-liquidity-crypto-lending-explained/#Crypto-Liquidity" target="_blank" rel="noreferrer noopener">liquidity</a> is a good starting place for crypto institutions under stress,” said Timo Lehes, co-founder of blockchain infrastructure company Swarms. 



A spokesperson for CoinFLEX did not immediately return a request for comment.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>