Shalini Nagarajan

Bitcoin Cash proponent Roger Ver is once again feuding with an embattled crypto company over bad trades worth millions of dollars — this time, it’s a subsidiary of bankrupt lender Genesis.



Genesis subsidiary GGC International filed a court summons in New York earlier this week, demanding Ver pay no less than $20 million to cover a set of crypto options, which expired at the end of December.



Ver, once referred to as “Bitcoin Jesus” for his BTC evangelism before staunchly supporting the Bitcoin Cash hard fork in 2017, says he won’t be paying up.&nbsp;



In a <a href="https://www.reddit.com/r/btc/comments/10ki2ll/did_roger_ver_get_rekt/" target="_blank" rel="noreferrer noopener">Reddit post</a> Wednesday, Ver claimed he has enough funds to pay Genesis, and even said he’d be “happy to pay,” but it’s Genesis that failed to hold up its end of the bargain.



“&#8230; Genesis was required by our agreement to remain solvent — as Genesis can’t ask its clients to play a ‘heads clients lose, tails Genesis wins’ game,” Ver wrote. He further claimed that he’d asked Genesis in June for assurances of its solvency, but didn’t receive what he wanted to know.



GGC International is a British Virgin Island company that facilitates crypto derivatives and spot trading, according to Genesis’ <a href="https://genesistrading.com/legal/regulatory-information" target="_blank" rel="noreferrer noopener">website</a>.&nbsp;



Genesis, itself a subsidiary of <a href="https://www.reuters.com/business/finance/who-is-barry-silbert-head-genesis-owner-dcg-2023-01-20/" target="_blank" rel="noreferrer noopener">Barry Silbert’s</a> crypto-conglomerate Digital Currency Group, <a href="https://blockworks.co/news/genesis-in-chapter-11-wont-insulate-silbert-winklevoss-says" target="_blank" rel="noreferrer noopener">filed for bankruptcy</a> last week, about two months after halting customer withdrawals and loan originations. But GGC International hasn’t filed for bankruptcy just yet.



<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">On the topic of <a href="https://twitter.com/hashtag/Genesis?src=hash&amp;ref_src=twsrc%5Etfw">#Genesis</a>: <a href="https://t.co/2a0fYu5P3E">https://t.co/2a0fYu5P3E</a> <a href="https://t.co/a6tA0HISMo">pic.twitter.com/a6tA0HISMo</a>&mdash; Roger Ver (@rogerkver) <a href="https://twitter.com/rogerkver/status/1618270413435568131?ref_src=twsrc%5Etfw">January 25, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Blockworks has reached out to both Ver and Genesis for comment.&nbsp;



While it’s unclear whether <a href="https://www.offshorealert.com/ggc-international-ltd-v-roger-ver-summons-with-notice-failure-to-settle-20m-expired-crypto-options/" target="_blank" rel="noreferrer noopener">courts</a> will compel Ver to cover the expired options, this isn’t the first time he&#8217;s been challenged on trading debt.



Last July, he was entangled with a smaller platform, <a href="https://blockworks.co/news/coinflex-takes-legal-action-to-recover-84m-from-single-customer" target="_blank" rel="noreferrer noopener">CoinFLEX</a>, after CEO Mark Lamb accused him of owing the company $47 million in USDC after he failed to meet a margin call.&nbsp;



CoinFLEX later filed <a href="https://blockworks.co/news/coinflex-ceo-files-default-notice-against-bitcoiner-roger-ver" target="_blank" rel="noreferrer noopener">legal action</a> in Hong Kong against Ver, saying its estimated losses from Ver’s refusal to pay the debt, which had nearly doubled to $84 million.&nbsp;



Ver denied owing CoinFLEX and instead alleged the now-bankrupt exchange actually left him out of pocket.



Updated Jan. 27, 2023 at 4:16 am ET: Added context in first paragraph.



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Roger Ver Says He Won’t Pay Genesis $20M For Bad Trades

<div id="highlights-block_62cbc50f15e17" class="highlights">
 <ul>
 <li>After serving former Bitcoin.com CEO Roger Ver with a notice of default, CoinFLEX now plans legal action</li>
 <li>The arbitration process in Hong Kong is expected to take 12 months before judgment is reached</li>
 </ul>
 
</div>



Crypto exchange CoinFLEX is seeking to recover $84 million from a single customer and is in talks with another US exchange to enter a joint venture to revive its business.



In late June, CoinFlex said a counterparty owed the exchange $47 million and it was forced to halt withdrawals. CEO Mark Lamb <a href="https://twitter.com/MarkDavidLamb/status/1541831697787928576" target="_blank" rel="noreferrer noopener">identified</a> the counterparty as Roger Ver, former CEO of wallet provider Bitcoin.com, and said he has been issued a notice of default.



After calculating the investor’s final “significant” losses in the exchange’s FLEX token, the total owed by the investor has now nearly doubled, co-founders ​​Sudhu Arumugam and Mark Lamb wrote in a <a href="https://coinflex.com/blog/coinflex-update-july-9-2022/" target="_blank" rel="noreferrer noopener">blog post</a> on Saturday.



“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,” they wrote. “It is clear to us now that he was wasting time and hoping for a bounce in the market that never materialized.”



The investor had cooperated and promised to pay or increase collateral to cover the shortfall, but that didn’t work out, they added.



CoinFLEX has begun arbitration proceedings in Hong Kong to recover the $84 million “as the individual had a legal obligation under the agreement to pay and has refused to do so,” they wrote. The legal process is expected to take about a year before a judgment is reached.&nbsp;



Ver, who became known as “<a href="https://www.investopedia.com/tech/who-roger-ver-bitcoin-jesus/" target="_blank" rel="noreferrer noopener">Bitcoin Jesus</a>” for his evangelism of the cryptoasset, addressed speculation that he defaulted on debt to a counterparty in a June 28 <a href="https://twitter.com/rogerkver/status/1541822377461415936" target="_blank" rel="noreferrer noopener">tweet</a>, alleging that the company owes him instead. He didn’t return Blockworks’ request for comment by press time. Last month, he <a href="https://cms.blockworks.co/coinflex-ceo-files-default-notice-against-bitcoiner-roger-ver/" target="_blank" rel="noreferrer noopener">told Blockworks</a> via Telegram that he stood behind his tweet and that his lawyers would issue a statement soon.&nbsp;



While the legal proceedings take place, CoinFLEX said it plans to raise funds from investors in the form of stablecoin USDC. Depositors will also be asked if they want to help the business by “rolling some of their deposits into equity.”



The exchange’s <a href="https://cms.blockworks.co/coinflex-plans-to-raise-missing-funds-with-new-token/" target="_blank" rel="noreferrer noopener">new token</a> — Recovery Value USD (rvUSD) — will be used to improve liquidity in the original or modified format, the co-founders said. It also seeks to make 10% of balances available for withdrawal within a week.



The new token’s future value is predicated on successful recovery of funds from Ver, according to the company’s <a href="https://cfv2-media.s3.ap-northeast-1.amazonaws.com/media/pdf/rvUSD_Whitepaper.pdf" target="_blank" rel="noreferrer noopener">three-page white paper</a>.



CoinFLEX, registered in 2019 in Seychelles, is a derivates exchange that allows users to earn interest by holding its stablecoin flexUSD.



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CoinFLEX Takes Legal Action To Recover $84M From Single Customer

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>
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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">“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>.



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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.



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