While crypto companies pausing withdrawals is something which has occurred across several platforms the way that these companies have gone about addressing the issues they are facing tends to differ. Unlike other companies that are having liquidity crunches and lack an easy way for the issues to be addressed CoinFlex blamed one simple client. When I first read about the company's plan this morning they had so far declined to name said investor but who came immediately to mind for me was 3AC since they are known to take out huge loans from several companies.
I was shocked when I later looked into what was going on with them and found out it wasn't a company like 3AC as I had initially thought rather it was a single individual. Even more, it was a person who has been around the space for years and I remember way back when it was thought at one point he might have been Satoshi. It was leaked earlier today that the one who owed so much money was Roger Ver. While his fame and standing in the industry has faded over time he is still a large player in the industry and now it turns out owes CoinFlex $47 million USDC. That's right even "Bitcoin Jesus" as he has been nicknamed cannot escape this winter. Just like 3AC he has been served a notice of default as well which could play a huge role in the company reclaiming this money.
Unlike 3AC which has continued to be silent about what they are doing even after being hit with their notice of default Roger Ver went on the attack and said that actually, he was the one owed money by CoinFlex something that the CEO of CoinFlex then came out and addressed confirming it was, in fact, Ver who owed the company money. To me what is so wild about this was that even with the leak initially, CoinFlex continued to say it would not name the party that owed it money, and really since Ver came out and attacked CoinFlex they were forced to let the cat out of the bag.
In an effort to resume withdrawals CoinFlex has decided to blend together good old fashion initial coin offerings with the current environment. CoinFlex is looking to roll out a new token called "Recovery Value USD" or rvUSD and sell them. These tokens are an interesting idea because they are based on the idea that the $47 million can be recovered and not only that but that it will be recovered with some pretty significant interest. Buyers of rvUSD will receive an extremely attractive 20% yearly return and is being offered to give Ver more time to raise the money that he needs to repay CoinFlex.
Now I have no idea how this could shake out. It could be the next big thing with really collateralizing personal debts or it could completely implode and result in even more money being lost beyond the $47 million that Ver is already in the red for. No matter how it shakes out though this type of idea is something that I only think crypto could pull off and given the right circumstances could very well work. Only time will tell as more of the story comes out and if the token has a successful launch.
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