After freezing withdrawals, crypto exchange CoinFlex plans to issue up to 47M Recovery Value USD tokens, offering a 20% annual return, to repay a $47M debt

Bloomberg 2022-06-29

Context & Ripple Effects

CoinFlex’s withdrawal freeze preceded a plan to turn a disputed customer obligation into a tradable recovery instrument. The exchange’s CEO identified a $47M USDC obligation allegedly owed by Roger Ver as the shortfall behind the recovery effort.

The proposal matters because restoring access to customer funds became tied to raising money through the token: CoinFlex later postponed the broader withdrawal resumption pending a successful raise, before offering limited withdrawals.

First-order effects

CoinFlex seeks to replace an immediate $47M collection problem with up to 47M RVUSD tokens, offering buyers a stated 20% annual return while it pursues repayment of the underlying debt.
CoinFlex customers remain exposed to the exchange’s funding execution rather than receiving an immediate full restoration of withdrawals.

Second-order effects

The recovery-token sale makes investor demand for a high-yield, exchange-issued claim a near-term determinant of CoinFlex’s ability to reopen withdrawals.
CoinFlex’s later 10% withdrawal allowance excluding flexUSD shows how the liquidity response shifted from a full reopening to controlled access while the funding plan was unresolved.

Third-order effects

If repeated across stressed exchanges, recovery tokens would turn customer-liquidity shortfalls into marketable claims, moving more resolution risk onto token buyers and creditors.
The pattern favors exchange recovery processes that ration withdrawals and raise new capital before settling customer obligations in cash.

The trend: Crypto exchange liquidity crises are being managed through tokenized recovery claims and staged withdrawals rather than immediate cash repayment.

Discussion

CoinFLEX Mark Lamb on x
CoinFLEX's Tokenization Solution to Resume Withdrawals and Normal Operations
@fatmanterra Fat Man on x
A verified insider has confirmed that the “high net worth individual” who owes CoinFLEX money is Bitcoin Cash advocate & CoinFLEX shareholder Roger Ver. Ver had a long on BCH, and the platform allowed him to run a deficit because he personally guaranteed he would pay them back. h…
@fatmanterra Fat Man on x
This is incredible. A centralized yield service, CoinFLEX, gave a $47m uncollateralized loan to someone who can't pay it right now. To fund other customers' withdrawals, they are now turning his debt into a token and selling it to people, offering 20% APY on it. Amazingly degen. …
@freddieraynolds @freddieraynolds on x
Alright so @CoinFLEXdotcom is issuing rvUSD ("recovery value USD") to plug their balance sheet gap caused by an unnamed crypto whale. Only one whale I know of with those RV initials. Discuss. https://twitter.com/...
@caspiancey Cas Piancey on x
A lot of people suggesting that because CasCoin withdrawals have been halted for two weeks CasExchange is ruined. No. We are strategically raising $47 million from the CasRecoveryCoin, which will offer 21% APR paid in DoubleCasRecoveryToken. Confused? Good.
@pentosh1 Pentoshi Powell Jr on x
There will be more stories like this, and more forced selling. Big and small (but the biggest ones are done imo) https://twitter.com/...
@fintechfrank Frank Chaparona on x
CoinFLEX CEO accuses investor Roger Ver of defaulting on $47 million loan. Ver appears to deny the accusations, noting: “This counter-party owes me a substantial sum of money, and I am currently seeking the return of my funds.”
@bennetttomlin Bennett Tomlin on x
$47 million? Wow. That's like 2,350 Bitcoins or 450,000 Bitcoin Cash https://twitter.com/...
@tante @tante on x
This is probably the dumbest thing I have seen in weeks. That guy should also go to jail. https://twitter.com/...
@arekfurt @arekfurt on x
You know this is a totally legit and sound investment because they're promising a 20% rate of return. 🤔🤦 https://www.techmeme.com/...
@thecryptolark Lark Davis on x
Whoa! Roger was estimated to have hundreds of thousands of #bitcoin at one point. And now this... https://cryptobriefing.com/...
@btc_jacksparrow @btc_jacksparrow on x
Are people actually that stupid to buy Roger Ver his debt? https://twitter.com/...
@seldo Laurie Voss on x
This Coinflex story is amazing. They lent about 1/3rd of all their customers' money to one guy, Roger Ver, who is also a shareholder in Coinflex. Now Roger is refusing to pay Coinflex back so they are... issuing a new coin to pay back their existing customers. https://twitter.com…
@williamlegate @williamlegate on x
This is borderline criminal & will certainly end in handcuffs. https://twitter.com/...
@lomahcrypto Loma on x
Mf really just copy pasted this from his PR/Legal team without formatting it. He's guilty, your honor. https://twitter.com/... https://twitter.com/...
@edstromandrew @edstromandrew on x
Our giant rich counterparties have defaulted on us so we are floating a rescue financing deal to the public and it's tokenized. I hope it's senior to all claims other than retail bag holders. https://twitter.com/...
@buttcoin @buttcoin on x
The funniest Roger Ver story, and maybe funniest Bitcoin story ever, happened after Roger renounced his US citizenship to avoid paying taxes and fled to St. Kitts. Back in 2015 he wanted to speak at the Miami bitcoin conference so he applies for a US Visa to visit 1/2 https://twi…
@chrisblec Chris Blec on x
This is insane. Stay very far away from this nonsense. https://twitter.com/...
@arjunkharpal Arjun Kharpal on x
Another wild crypto story. CoinFlex has a big customer in debt. The individual can't repay + CF could not liquidate the account b/c of a special clause. So CoinFlex issued a new coin to raise $47M to plug the gap. Coin has 20% yield. What could go wrong? https://www.cnbc.com/...
@coinflexdotcom @coinflexdotcom on x
We have temporarily paused withdrawals on @CoinFLEXdotcom as a protective measure. We are working to resume withdrawals as soon as possible. Please find our announcement here with more details. Thank you for your support. https://coinflex.com/...
@dougpolkvids Doug Polk on x
Recently CoinFlex paused withdrawals due to “extreme market conditions” This is, in my opinion, not an acceptable action for an exchange to take. According to their statement, “Withdrawals are estimated to begin June 30th” July 1st, I'll be posting my own statement. Thank you.
@coinflexdotcom @coinflexdotcom on x
Hi everyone, we're sharing our latest update on plans for re-enabling withdrawals on the platform 👇 https://coinflex.com/...
@devahaz Deva Hazarika on x
For people sad they missed out on risk-free 20% returns with Anchor, here's a new 20% yield crypto opportunity! https://twitter.com/...
@alphaketchum @alphaketchum on x
Actually not a bad idea. Selling off a part of their book using a token. Run it. https://twitter.com/...
@bcrypt Yan on x
history repeats itself 😂 https://twitter.com/...
@carzonfye @carzonfye on x
This is basically how I would imagine it would work if warhammer 40k orkz had financial institutions https://twitter.com/...
@dixonpiper69 Dixon Piper on x
TLDR: send us all the money we lost, we promise we won't go bankrupt and will pay you back somehow, someday. Crypto continues to amaze me every day https://twitter.com/...
@ave_eli @ave_eli on x
Crypto slowly “reinventing” all the ideas that have already blown up in tradFi, innovation at its finest. Only thing missing here is a crypto debt rating agency - someone call the VCs and devs, let's get a token going for a new debt rating agency for shitcoin CDOs, derivatives. h…
@joshelman Josh Elman on x
There were thousands upon thousands of bank failures in the 1920s / Great Depression due to runs on the bank. This resulted in the 1933 Banking Act, FDIC, and many stringent controls. 2020s - we're seeing runs on the bank and crazy solutions https://coinflex.com/...
@robaeprice Rob Price on x
1. Take out $47M crypto loan 2. Refuse to pay it back 3. Wait for your lender to try to sell $47M in tokens to public promising a 20% yield to cover your debt 4. Buy tokens 5. Collect yield 6. Repay crypto loan 7. Profit and/or total market collapse https://twitter.com/...
@alexhern @alexhern on x
I'm sure THIS time, the promise of a 20% risk-free annual return will absolutely come to pass. https://www.bloomberg.com/...
@unusual_whales @unusual_whales on x
CoinFlex reportedly is planing to raise funds by issuing a new token. The token will have a 20% APR. They paused all withdraws 4 days ago. https://twitter.com/...
@freddieraynolds @freddieraynolds on x
TL;DR: someone supposedly wealthy and “high-integrity” missed margin calls and is in debt to CoinFLEX for $47M https://twitter.com/... https://twitter.com/...
@bitfinexed @bitfinexed on x
That's a Bitfinex move if I ever seen one. https://twitter.com/...
@fatmanterra Fat Man on x
They also pitch a pivot into a new model with increased transparency, pseudonymous balance tracking, and public liquidation points. Little do they know, they just accidentally reinvented DeFi. https://twitter.com/...

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