I'd be interested to know the exact mechanics, there could well be some things in place that prevent "Mary" going into a big negative balance, but off the top of my head I can't think how.

5 seconds later, I just thought of one!........

If for example the average amount of paper, at any given time, on the buy side for ETH is a bid for a quantity of 10000 ETH, Coinflex might be automatically limiting the sum of all of the clients on the exchange, who are long, so all added together, to a fixed percentage of 10000, e.g. 20%, or 2000 ETH.

This way, that queue I referred to, the queue to auto sell is much smaller, plus even if the whole queue get filled after a big gap down in price, the total dollar amount that CoinFlex are under collaterised by is greatly reduced.

The negative of having this type of control in place is that you are vastly restricting the volume of trading and the size of positions that clients can have which sort of defeats the object of having a trading exchange.

The obvious and more sensible solution is of course to not give clients a ridiculous 250x trading margin multiple.

Something like 10x or maybe 25x instinctively feels much more sensible to me.

If anything, the explanation of how margined trading works and the fact that 250x, in my opinion is an utterly ridiculous multiple CoinFlex allow, is great for Doug' Polk's defence that he acted in good faith and took CoinFlex's assurances at face value.

Plus of course, that a chat thread of intelligent people who are also good at maths and aptitude based thought and analysis
have pretty much said collectively, thanks for explaining it. (we had no real idea that that is how it works)

Btw, that is totally cool, I only know because I was a market maker for many years and in much more complex instruments than futures,
and (not boasting, just a reality), I am probably in the top 0.1% (not top 1%) of the population in innate maths skills, not learned, academic math skills.

So, this is a great defence for Doug Polk. How on earth could he possibly understand such a very niche topic. In fact do Coinflex themselves even fully understand it completely, I mean why the **** are they are offering 250x margin trading?

With the emphasis that I have no evidence whatsoever, and am not alleging anything, the 250x thing could be a possible red flag
that increases the possibility that CoinFlex is a pre-meditated Ponzi of some kind.

Because you can see the attraction of 250x, can't you. I mean someone could buy 0.5 of a Bitcoin, see it double in value, stick it on CoinFlex,
do a couple of decent sized winning 250x leveraged trades and become a millionaire. Very possible.

250x, think about it. Suspicious? Maybe.

You are absolutely spot on. Great post.

I am struggling to see how a fundamental part of their business model being "utterly ridiculous" takes away blame from Doug?

If anything, their utterly ridiculous business model should be easier to spot, while he was doing his due diligence, than your average kinda ridiculous crypto business model.

Great explanation. Thanks PokerPlayingDunces

I assume the compensation they promised to Doug must have been really substantial, that he decided after all these years calling out everybody for the slightest mistakes and staying away from sponsorships, to give his name to a crypto exchange.

And to shill this so hard (Having the CEO on the podcast saying people should invest all their money in Coinflex).

I wonder if celebrities Paris Hilton, Kim Kardashian, Reece Witherspoon, Gweneth Paltrow. Tom Brady, Matt Damon, Mike Tyson, Floyd Merriweather, etc. put more due diligence into their crypto endorsements than Doug did?

https://news.yahoo.com/these-are-the...142036509.html

His reputation in the poker community should really be tarnished after this. I will never trust a word he says again and I hope he will never call out anyone else ever again because he has no room to talk.

Did they promise 20% apy?

Out of curiosity posters in the thread. Imagine you are put into Doug's shoes, right now, with all that happened that you can't change - what would you, "Doug" do to try to make it right?

Well the link above said Reece Witherspoon tweeted this:

"In the (near) future, every person will have a parallel digital identity. Avatars, crypto wallets, digital goods will be the norm. Are you planning for this?"
_____________

I guess everybody but the billion people in china and the 7 other countries where non-government crypto is illegal.

Not much he can do, but lets say Negreanu was in his spot right now we would hear from Doug about it day in day out, with "Breaking news" and "This just in" and hour long podcasts explaining why the video he did put out lacks taking resposibility and is only trying to shift blame away from him.

Yup

When is poker news doing a segment?

When is sryslysrs making a funny video? We could all use some laughs in this trying time.

I mean once you schill a trash scam, and a bunch of people get burnt what can you really do?

He's not an idiot. He had to know this 15-20 percent guarantee return rate was a complete scam.

Two big key factors IMO in whether us NVG amateur judge and jury posters should "convict" Doug Polk of any significant wrongdoing are:

1, Establishing with certainty if the fake Doug Polk Linkedin profile was definitely fake. If it wasn't, then as someone ITT commented,
"Coinflex wasn't his first Rodeo".

2. Getting more info about how much Doug Polk stood to make from promoting Coinflex. If the amount could potentially quickly run into the millions, and wasn't say in the $100K to $500K range, then for me at least, it makes him more likely to be guilty, because it points more towards greed overtaking his desire to be concerned about people that he was encouraging to invest.

So if it's proven that it was a fake Linkedin profile, meaning he's never before been involved with defi / Crypto farming before as an investor
or a director or a key employee, and if his earnings/potential earnings were not of hugely significant figures, in comparison to his net worth,
then I personally would say that he shouldn't be "convicted" on anything, by us on NVG that is, but that he should be labelled as being
very sloppy and quite foolish, with a moderate amount of greed thrown in.

Is he involved in coinflex at all? i ask, because if Doug is sued and suit goes the deposition phase, couldn't this guy also be deposed if he has been involved with promoting coinflex?

The whole or many of Doug Polk's "crew" might be involved, either/or/both as contributors/creators/workers in some way, to him being an ambassador, or as people that took his advice and now have money/Crypto/flexUSD stuck on CoinFlex.

After all, he is known as "The Supreme Leader" by members of his crew and his crew could be pretty big if you include Upswing, The Lodge, players he stakes and other associates.

In fact, if some of the people closest to him, within the aforementioned groups of people, are now deep under it because they have assets stuck on CoinFlex, then this would also be part of Doug Polk's defence, that there is no way he would deliberately put his closest friends and associates "in harm's way". (Borrowing a phrase from his own announcement video.)

I understood the explanation provided by the poster you are quoting, and I think most would agree with your take on this.

I am no finance expert, I dabble with financial instruments that I understand within my own appetite for risk. It doesn't go much further than look for value, buy, hold, unload after I profit. So if my analysis or questions regarding this topic are too simple, or naïve, whatever, feel free to correct me where I am wrong.

Every financial market is a zero sum game. There is X amount of money that can come in, Y amount of money that can go out. Some people win, some people lose, but there is a finite amount of money in play when trades are settled.

Given the example provided ITT regarding "Mary Smith" --- someone, somewhere, in this series of trades, has lost a boatload of cash. Let's take the Mary Smith example and let's say Mary makes millions with 250x margin. Someone, somewhere, is losing... I'm not saying it's CoinFlex, but someone or some entity in the crypto community is having to pay the piper so that Mary can bank her millions.

So then Mary makes her millions... and the cash (Actual US Federal Reserve Notes) is deposited into her account after she banks her big win.

So Mary banks her big win, at someone else's expense. Those who bet against Mary lost, Mary's money is now in US-FRNs, and now you have a bunch of money withdrawn from cryptoworld. Mary has taken her win, went on about her life, and whoever took the L... has also lost their initial capital, which was originally purchased using fiat.

My point being, this sounds like a game of music chairs where chairs keep getting removed and someone, be it coinflex or someone in the futures market, someone is going to be on the losing side of the bet and they will be left without a chair.

So if that's correct, the promise of high yields only seem possible as long as new money keeps coming in or if CoinFlex is flawless in hedging and leveraging. I bolded the last part, because this seems impossible to me. Okay, but let's rephrase it, CoinFlex has be right, more times than it's wrong, to pay a high yield.

I suppose my bottom line is this: Since November 2021, coinmarketcap says that 1.8Trillion US dollars has left the crypto world. That is an indisputable fact. When that much capital leaves a market, how can coinflex mathematically be right, more times than they are wrong? It seems impossible.

Not only that, Coinflex has money that people have deposited, that they aren't letting people withdraw... and now they are asking for more?

Even coinbase backed ventures like Vauld are now suspending withdrawals. The whole crypto-credit crisis seems like one gigantic ponzi scheme that only continues if the caveat the everyone in the world dumps national reserve currency and uses crypto for their everyday life. That's the only way to stop cash from leaving the system and causing what has happened.

I don't know, at the end day, someone's always left holding the bag. It's one thing to deposit 100k --- lose 50k and withdraw your remaining 50k and take the L.

It's another thing to deposit 100k, lose 50k, be unable to withdraw your remaining 50k, and be asked to deposit more money, which, is what is happening to coinflex members if I understand correctly.

The person who I was quoting, (referencing information from), was myself!

The zero sum game is a good point, which is why the only way everyone can make money in Crypto is if it's a near continuous bull market.

The key thing about Coinflex as a trading exchange, is that to run it properly they need to be financially disinterested at all times in the underlying price movements of any assets that have been entrusted to them. They also need to make sure that clients trade within their margin and that they as an exchange do not leave themselves open to the negative effects of the market "gapping", as I described.

pretty sure that is a faked linkedin as well.

Wild how the scammer only choose to impersonate one poker pro, and incredible how this scammer also reads NVG and then the scammer decides to take their fake profile down within two hours of it being posted here.

So was it a scammer pretending to be Doug polk? Or was it Doug polk , scamming other people(which would make Doug’s statement correct)


Wtf is coin central?? Is that where Doug advertises his **** coins? Cmon guys. It’s a scam. Always been a scam. It’s a Doug scam

Been away on a vacation but have been reading this thread.
As you can see by my join date I'm old as dirt.

I watched Doug's video/explanation and some things are pretty clear.

He was almost certainly told by his legal advisors to STFU. (any Lawyer worth his salt will tell you this)
The problem is if he says nothing it makes him look bad in the poker community and he has numerous business entities attached to his persona/reputation.

There are no "good" options here for Doug. Even if he is innocent (which I think he is IMHO) it makes him look bad.

IMHO I don't think even Doug believes it himself when he says he did enough due diligence.
I'm sure deep down he wishes he would have done much more when promoting an unregulated entity.
I'm sure any legal advisor would say under no circumstances admit you are at fault in any way. (even if you really think you might have done some things differently)
He doesn't want to open himself up to being sued by admitting some small partial liability. Those words would almost certainly be used against him.

Being older I have seen many of these "bubbles" and "opportunities" come and go. When things start to go south even people who were thought of as being respectable/ethical will pull some seriously dodgy **** to keep the lights on. (even going back to the dotcom bubble, stock market and even Full Tilt poker)
Sometimes I don't think people learn from history. I know people rail on the likes of Warren Buffet but not buying into things you don't really understand is some pretty sage advice.
Or at least only committing a small fraction of your investment portfolio to these high risk endeavors.
When people go all in on this stuff like Crypto or NFT's, you only hear about the winners.

Maybe I'm alone but when I look at videos featuring NFT's and Crypto by "experts" I just shake my head. IMHO Nobody really knows anything. They only know what they are told.
And as Doug found out what you are told could end up being total bullshit.

FWIW I like Doug a lot but he probably deserves his time in the barrel over this one. A lesson learned the hard way.

What due diligence do you have to do when he is telling people they will get 20% return on their money? I mean again he is either dumb as a bunch of rocks to believe that or he knew that was bullsht and kept promoting CoinFlex anyways.

Believe me Doug is not innocent in this. Not by a long shot.