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Roger Ver sued for reneging on $21M debt to Genesis trading group


Hazel Wyatt

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Roger Ver has once again reneged on his debts, suggesting that the man formerly known as ‘Bitcoin Jesus’ has forgotten the commandment ‘thou shalt not steal.’

On Monday, GGC International Ltd filed a summons with the New York State Supreme Court, giving Ver 20 days to answer the complaint filed against him for failing to honor his financial obligations. Should Ver choose not to respond, a default judgment will be entered against him.

GGC International, a British Virgin Islands-registered offshoot of the flailing Genesis Global Capital crypto lending platform, says it’s owed “money damages for [Ver’s] failure to settle cryptocurrency options transactions that expired on December 30, 2022, in an amount to be determined at trial but no less than $20,869,788.” GGC also wants Ver to pay its court costs for leaving them with no option but to unleash their attorneys.

As described on the Genesis Trading website, GGC is “wholly owned by Genesis Bermuda Holdco Limited.” Instead of lending, GGC “carries out spot trading activity and enters into derivatives referencing digital assets as a principal.”

Genesis Global Holdco filed for bankruptcy protection last week, but that only covered itself and two lending subsidiaries, Genesis Global Capital, LLC, and Genesis Asia Pacific Pte. Ltd. As the bankrupt entity indicated last week, other Genesis subsidiaries “involved in the derivatives and spot trading and custody businesses and Genesis Global Trading are not included in the filing and continue client trading operations.”

In other words, GGC International is still a going concern. In fact, it’s one part of the nine-member unsecured creditors’ committee appointed in December by the U.S. Trustee’s Office overseeing the bankruptcy of the FTX exchange. So, GGC has some experience getting screwed over by its former customers.

It’s possible that, like many of us, Ver was confused by which members of the sprawling Genesis family had gone belly-up. Perhaps he thought that, with Genesis being preoccupied with bankruptcy paperwork and hearings, he’d be able to duck responsibility for his losing wager. It wouldn’t be the first time.

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Do not cash this man’s checks

 

Last June, the Hong Kong-headquartered/Seychelles-registered CoinFLEX exchange revealed that Ver had defaulted on a $47 million marker despite offering “stringent personal guarantees around account equity and margin calls.”

 

Seems CoinFLEX was silly enough to offer Ver a “non-liquidation recourse account” that prevented them from liquidating his position even when it slipped into negative equity. Ver’s debt eventually ballooned to $84 million, and CoinFLEX filed for restructuring in August.

 

Ver denied any responsibility for the debt and even had the balls to tweet that CoinFLEX owed him “a substantial sum of money” and he intended to collect. Guess that’s what you get when you accept a pinky-swear guarantee from a guy who did ten months in federal prison for illegally selling explosives and whose entire adult life has been defined by a belief that the rules don’t apply to him.

 

When it comes to his crypto investments, Ver appears to think he’s Nicky Santoro in the movie Casino, whose betting system was spelled out thusly: “When he won, he collected. When he lost, he told the bookies to go f*ck themselves.”

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Barry Silbert’s very bad January

 

As (bad) luck would have it, both CoinFLEX and Genesis have a common thread beyond Ver: they are/were part of the crumbling Digital Currency Group (DCG) portfolio. As we speak, DCG boss Barry Silbert is probably frantically combing through all his various crypto appendages for any further Ver-related liabilities that should be marked as uncollectable.

 

As if Barry’s 2023 wasn’t already off to a crackerjack start, Monday brought a new class action suit filed against DCG and himself by a law firm based out of Stamford, Connecticut—Barry’s home turf. The suit seeks to represent individuals and entities that were foolish enough to enter into lending agreements with Genesis.

 

The suit piggybacks on the recent civil charges brought against Genesis and the Gemini Trust Company by the U.S. Securities and Exchange Commission earlier this month. Those charges accused both companies of offering unregistered securities to the public.

 

The class action suit goes further, accusing Genesis of committing securities fraud “by making false and misleading statements that intentionally misrepresented [Genesis’s] financial condition.” The scheme was intended “to induce prospective digital asset lenders to loan digital assets to [Genesis] and to prevent existing lenders from redeeming their digital assets.”

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