There are grocery stores I frequent in Berlin where when they ring you up, often the price advertised is lower than what they actually charge. So it says 1 euro but when they ring it up it's 1.2 euros. They would say it's an honest mistake and they just forgot to change the pricetag. But when it overwhelmingly happens that they overcharge you instead of undercharging you (like 50:1 ratio), it's an invited error, AKA willful ignorance, AKA retail fraud, AKA a scam. There are other grocery stores, like in Toronto, where the opposite is true. They have a policy where if they overcharge, the item is free. Unsurprisingly, it almost never happens that they overcharge you (because it's easily preventable if you actually care to). Choosing to have a system in place where errors more often than not work in your favor is actually no different from straight up fraud, the only difference is you are more likely to weasel your way out of it afterwards if you choose the more insidious approach.

If you neglect to do your due diligence and purposefully avoid red flags, because it's +EV, then you're guilty of invited error / willful ignorance, which is just a more insidious, ugly version of straight up scamming. Doug imo would certainly, without question, be guilty of that. I've pointed out multiple examples many times. The fact that the general public might not consider it scamming is what makes it so insidious, because actually, it is. On top of that, he took the extra steps of a) posting a video where the CEO tells people to invest all their money in stablecoins, which is wildly unethical on it's face, and b) lying about not seeing any red flags, in fact he's baffled that it just hit him out of nowhere, which is obviously BS.

Doug in my mind is without question a scammer, based on the facts I know, I have total confidence in that. When asked on twitter if he profited (despite depositing 100k of his own money) since they allowed 10% withdrawals, he said he'd have to crunch the numbers, but it would be roughly even. In actuality, he's well aware he profited, and just doesn't want to admit it. If he didn't, he would say so clearly. I could strengthen that claim, but in any case, it's +EV. But the scam works because the vast majority of people, if you look at twitter, reddit, etc. don't know the facts. The hard facts show he was purposefully avoiding red flags and lying about it, then relying on the general public's ignorance of a) the facts, and b) the concept of invited error. So therefore 5 years from now, it can be brushed off like no big deal.

Grocery stores in Germany?

Sounds like a straw man argument..

Purposefully having a system in place where you overwhelmingly overcharge instead of undercharge, and purposefully avoiding red flags of a scam when accepting payment for promotion, are both examples of invited error, AKA scamming. The fact that you don't understand this is what makes it a good scam. The grocery store scam is particularly good because it's many small amounts of money added up, where any one complaint seems petty. Doug's scam actually isn't as good of a scam, but it's still pretty good.

Exactly.

Even if he never apologised, quit Coinflex and never mentioned it again. It would be a better look than going on Twitter and bragging about his scam not being as bad as others, months after the collapse.

Doug is obviously a scammer and it's sad how many people defend him

He is a dirty guy, imagine if Charlie Carrol did the same businesses as Doug's Wife, Doug would have a field day calling out these products, but instead it's his Wife so he shills bullshit scam products. He's a twisted guy, biased as they come. It's sick what he did to his followers.

I think it is out of order and insensitive that he joked about the FTX debacle in a way that sought to minimise the severity of the Coinflex debacle and his role in promoting the Coinflex exchange and FlexUSD.

However, I stick to my view that it was not a pre-mediated scam strategy by him, and probably wasn't by Coinflex either.

But IMO, most likely Coinflex was run by idiots who had their heads in the clouds and who didn't have a proper understanding of risk control and hedging.

Also, Doug Polk IMO, didn't do a deep enough dive into the financial mechanics of Coinflex before becoming a promotional ambassador for them.
That was not a crime, but it was sloppy by him IMO, as well as inconsiderate to his social media followers and viewers.

There is no evidence in this thread that I am aware of that demonstrates that he is a scammer, nor have I seen any evidence or information suggesting that his wife's
tanning products are a scam.

In anyone has any such information for either of the above, please post it, and I am happy to change my opinions.

I'm sorry for saying it's a scam product and the rage post.

I think the bear market exposed this really fast… had btc done anything but nose dive there’s a good chance nobody would even be aware of the risk taken. Anyone who thinks Doug scammed is being results oriented.

I don’t even think he needs to apologize bc that would be weird to apologize for something you didn’t cause.

Again you guys are giving him too much credit as a crypto guy. And by too much credit in this instance I mean too much blame.

The guys that actually ran coinflex and made the decisions to be under collateralized are to blame. Roger ver not making margin calls is also largely to blame.

Doug is a spectator who likely wasn’t aware of the situation until after and then immediately left.

While I agree with some of your points, I think you are going too far the other way in favour of Doug Polk.

It's not as if he is a celebrity in sport or the arts, he's a celebrity in a field that is very maths and logic based, I mean he even used to create his own manual type sims and game trees for HUNL before the advent of solvers, studied solvers for the HUNL challenge with Daniel Negreanu and has to be/must be, aware of solvers to joint head up a poker coaching company.

In addition, he is an expert, or became an expert, at understanding the algorithms that YouTube use and Facebook use, and probably other social media platforms, with regards to him promoting his channels and promoting and advertising his poker coaching company.

So we are talking about someone whose whole business life heavily revolves around, and depends upon, being very skilled, diligent, and expert at analysing data, and systems that are influenced by data.

So when a Crypto trading exchange tells him "all assets entrusted to us and all positions held by clients are fully collaterised", he should IMO ask "how, and show me exactly how". He should then take the answers and the examples that he has been given and do some deep analysis on them, and any parts that he does not fully understand consult with experts that do, as well as go back to Coinflex for further clarification and with any queries.

Reading between the lines, it appears that he did very little of the above, and his main or perhaps only due diligence was to run some checks into the background and track record of the Coinflex team and ask people for their opinions on them. If that's basically what he did then that is not enough IMO and was a very slapdash approach when risking his own money and reputation and the money of potential investors who might be encouraged by him promoting Coinflex.

The Roger Ver thing, if true (not proven yet), is/was something beyond his control, nonetheless Coinflex were allowing, actually encouraging clients, to trade on up to a 200x margin multiple, which is plainly ridiculous, and afaik had no systems in place to protect against market gapping, leaving clients' positions under collateralised. (Market gapping risk is covered by me earlier ITT)

My feeling is that Doug Polk was so carried away with the euphoria of Crypto, Crypto Trading Exchanges, and Crypto Lending for a great yield, that he forgot to take a step back and look at the whole thing dispassionately and completely objectively.

He also, as I mentioned, put too much emphasis on looking at the individuals running Coinflex and not enough on analysing their business model.

Hindsight of course is a wonderful thing, however, the mere fact that Coinflex is operating in an unregulated field is enough to tell anyone that extra special attention needs to be paid to all of the risks and a much deeper and more probing analysis of everything needs to be done first.

P.S. I have been struggling typing the phrase pre-meditated ITT. Previous versions typed by me have been pre-medicated and pre-mediated. They were not Freudian slips, just me trying to type very quickly, and failing!

There’s a good chance Doug could have done all the due diligence in the world and the numbers could have been purposely distorted in their financials.

I’ve literally had people hand me 2nd and 3rd sets of budgets to cover their tracts. It’s not far fetched.

My read is doug was kept in the dark.

Also the fact ver missed margin and caused this accelerated the whole process.

Financial institutions like hedge funds take crazy risks all the time and when they’re successful we never hear about them.

He may have been lied to,.... but kept in the dark, that part isn't really possible, because all of the key things such as 200x margin trading, market gapping risk, the fact that Coinflex is unregulated, the need for them to hedge all positions at all times, are things that are either in their white paper, clear as day on their web site (e.g. 200x margin trading), or obvious to people who are in the field of running hedge funds, or are arbitrage traders, or similar.

I concede, and made a point of it earlier ITT, that Doug Polk couldn't possibly know of some of the more complex concepts regarding hedging and market gapping, only experts in financial trading would know these, but this goes back to my point that he IMO should have looked for more expert advice in those matters.

Imagine if for example you and I were asked to promote a new medicine (drug), or tickets to fly on the space shuttle, or off plan properties in a loosely regulated country, would we just look into the people running each of those businesses and be happy to endorse them just based on, "I've asked around and they are a good bunch of guys", "I've researched their previous businesses and they were soundly run", and "they told me that their drug / space shuttle / legality of building on the land,.... is safe."

Would you just go ahead and promote it? Of course you wouldn't, you would do your own due diligence first and seek expert advice, before promoting it or putting any of your own money into it.

Well, the three phrases in quotations above are essentially the due diligence and checking up of stuff, that Doug Polk said he did.

I mean you’re probably right on him needing to do more due diligence… In this scammy world we live in you can never do enough.

Hindsight is 20/20 though very easy for us to say after the fact.

I can't stand Doug, and strangely I agree with him almost all the time, it's a weird thing. But despite my mostly disdain for him, calling him a "scammer" is way too strong, even though it makes me laugh for the sole reason that Doug is maybe the most "poker ethically" sanctimonious of all the poker players, ever. In his mind he's never done anything remotely unethical. He's even rationalized away all the shameless shitting on people to pump up his youtube channel he did. Guy is clearly further down the sociopathic spectrum than most of us are.

But a SCAMMER? No. if hes a scammer for coinflex than virutally everyone in the crypto world and a lot in the poker world are also after this FTX mess.

I don't think you're wrong... But has he promoted a scam? Whether he realized it or not, he did.

The screencaps of the Twitter posts he made are well-documented in this thread. People were tweeting him, telling it was a scam, and his response wasn't "You make a good point, I'll investigate it more" His response was to offer people 100x odds that it wasn't a scam.

One of the reasons I believe Doug was sought out by CoinFlex was due to Doug's promotion of other crypto projects... most of which are essentially vaporware... through his web property CoinCentral.

Additionally, Doug is well connected with high stakes poker players, who often have access to crypto, who may want to put their $ in flexusd to get the APYs that CoinFlex was offering. That would help jump start CoinFlex and provide ample liquidity for thier project.

There's a pattern of Doug creating online media products that cast him as an expert or an authority on a topic, when there is no possible way he could have the expertise required to be an expert in said field.

If you frame it that way, Does that qualify him as a "Scammer?" Maybe not in the sense that he was actively attempting to defraud people... but it does seem like he was an accessory to this, regardless if he feigns ignorance after the fact.

Very ironically, by his own really rigid definition of what a "scammer" is, (listen to his pod with Jungle where they argue about this), he absolutely would be one. But for my own less rigid view, I think the word scammer is basically the worst thing you can call someone in this world, and shouldn't be used lightly ever. In this instance Doug was probably just overly ambitious and a bit greedy, not outright scummy.

If the man himself describes what he did as a scam why is anyone left defending him? Not to mention doubling down on scumbagarrey with recent ridiculous tweets about Curry and FTX.

Well this is a bad take, I warned everyone thousands of times. I was aware of the risk taken, not everyone thought 8% yields were legit, go look in the bitcoin thread, I went through their tos and showed them how Tos were FOS.

I pointed out how they all were lending at the ridic high yields but not 1 of them was borrowing.... then I asked them why would someone borrow crypto at such high rates when they can borrow USD at such low rates back in 2020! They didn't have a answer, I'm not wiz kid, I just have common sense and basic understanding of markets. So anybody saying " Didn't know" at the same time they self admitting they below avg in market intelligence. If he has a below market level intelligence ( which he does) assuming he didn't know he was going to rape his followers, then he had no business trying to pawn himself as some kind of expert along the way.

Don't forget he let the CEO come on Dougs PODCAST and let him beg people to put all their money in his scam. That didn't even raise a red flag to Doug! Doug went after other people shilling what Doug deemed scams, but he doesn't like people going after him, after he helps promote scams.

There are a number of legitimate reasons why people would borrow USD at high rates using crypto (Bitcoin) as collateral and these are covered earlier ITT.

But I agree, it is dubious as to whether there would really be enough volume of borrowers to match the number of lenders (FlexUSD holders), to make high yields sustainable long term.

I did point this out on Twitter a long time ago, and I think somewhere in this thread too, that a bull market in crypto was essential to create enough volume of people wanting to borrow USD against crypto. In a bear or flat market most people will just straight sell their Bitcoin for USD if they need USD, they won't hold the BTC and pay 10% interest to borrow USD.

Again, the above paragraph is really obvious to people with financial market experience and aptitude in that field.

If in theory someone purposefully ignores red flags of a scam, and promotes it anyway (because it's massively +EV), are they a scammer? Why would that be any different than knowing it was a scam in the first place?

I say it would be no different than a person doing this:



Doug was absolutely unable to promote CoinFlex in good faith, period. The fact that he called out Roger Ver as a scammer, and Roger's face is on the front page (regardless if he's listed as an investor), it proof enough. If CoinFlex wasn't a scam, having Roger's photo there adds credibility to Roger and implies he's not a scammer. You simply cannot call that anything other than a red flag, and you cannot be brand ambassador in good faith in that situation, it's absurd. Then he was asked about the time Mark encouraged people to invest all their money into stablecoins, and Doug told him he sounded like a scammer, Doug had no explanation (it's impossible to explain that one away). That one is also simply absurd. Then you add in other factors, like that he was dumbfounded attempting to explain where the 5-20% no risk yield is generated. That alone is actually very bad, although not utterly absurd as the other two.

In order to argue Doug is not a scammer, you'd have to argue he's not purposefully ignoring red flags. But nobody has actually seriously attempted to argue that by addressing actual facts that show he was ignoring red flags. Doug can be seen on tape saying to Mark, "that sounds like something a scammer would say". Is anyone prepared to argue that by continuing to promote it anyway, he's not ignoring a red flag?

If Doug could actually explain (even erroneously) where he thinks the yield comes from, Roger's face wasn't on the front page, and never acknowledged that Mark sounds like a scammer, then you'd have a great argument that it was simply a mistake on his part. But as it stands nobody has been able to argue that Doug is not a scammer, they just pretend that invited error does not count as scamming, when it obviously should and does.

And the fact is Doug definitely lied when he said he was shocked and didn't see a single red flag, even in hindsight. That is utter BS.

You make a good point… people weren’t borrowing enough to make their scheme of high yields possible.

I still think Doug wasn’t part of the decision making process and most likely not privy to information.

But you are right that there were some red flags and he probably should have seen it coming.

I still don’t think Doug knowingly did this so maybe his best defense is incompetence.

And in that Simpsons clip above, you can see Homer knows he's not allowed to eat the pie. So attempts to "accidentally" eat the pie, but bashes his head on the counter, rather humorously. He then realizes that eating the pie purposefully is no different than via invited error, so he just eats it.

Doug would be Homer in this situation, and the pie is EV you gain via promoting a scam. You aren't ever supposed to gain EV by promoting a scam, but if it's an "accident", then surely it's okay. If it were truly an accident, that would be one thing (simply negligence), but by ignoring the red flags by which you'd determine it's a scam, it's no longer an actual accident. It's just scamming that you can get away with.

Everyone is making some good and valid points.

I think the balanced view taking everything into account that we know thus far, is that he was not scamming, but that he may have been negligent.

Whereas I think that the balanced view is he is a scammer and given we know scammers lie should take everything he says in his favor with a you need to prove it attitude. He sure has no problem accusing others of scamming and should be held to his own avowed standard.

I think given what we know at this stage, or at least what we think we know, if this was a legal case that we were hypothetically prosecuting, it would be very easy to demonstrate/prove negligence, but extremely difficult to demonstrate/prove scamming.