no ones dying here no worries, i outline i think both doug and a the exchange are at fault, but also no one here really has any clue what they are talking about, you maybe the only exception

curious what you would be able to verify say 6 months ago? assuming he had access to all balances and open positions, would there be some red flag assuming roger had that position open at the time and it was fully collateralized (not sure if either is true). I don't think that it was just bad luck but it was bad risk management, how are you able to verify exchange management decisions 6 months down the line in your initial DD?

It's all speculation at this point. There was a reddit post that said that the average transaction amount for various exchanges. Kraken being around $50 whereas Coinflex was doing about $1k per transaction. This despite Kraken being an order of magnitude of a bigger operation. To think that Coinflex only gave Roger Ver permission to what would amount to the business failing loan (not sure if that is right word) seems dubious. It seems to me much more likely that CoinFlex would give multiple parties this option.

Again, the notion that Roger Ver was given some loan that he didn't pay out on is just the Coinflex side of the story. This story could be just a viable scapegoat for some other malfeasance.

broadly speaking most well-run companies have a risk management system in place that works every day to consider every possibility and there are stronger risk teams and weaker risk teams. to get more granular would be hazardous because it delves too much into speculation.

re the bolded, this gets into weird territory. maybe an actual sharp risk person could have noticed things 6 months ago. but there's too much speculation.

i guess more broadly speaking, if we're framing it as doug 6 months ago getting everything from the company in DD... i guess that's kind of a weird strawman that I don't want to tackle. It infers that, in a hypothetical where most smart people are given a stretch 6 months ago to do research on what's available and either attach your name or don't, that most people would be in Doug's position.

I don't disagree (I guess), I'm just more positing that the responsibility to attach a name is significantly stronger, and if you're going to have youtube followers throw money at something you need to be at a higher rung in the decision or responsibility chain to have actual responsibility over company decision or direction, at least if we're talking a crypto exchange. So to that I'd say, he should have either been more on top of everything every step of the way or he shouldn't have attached his name at all. The consequences of getting rugged are so severe that a position where you don't have equity or a say in the company but theyre paying you in their coins to be their representative... it's just dirty and reeks of no skin in the game grift. "I don't deal in the inner workings of this company but they are paying me to tell you to get some sweet APY with them". barf.

Again (not calling out anyone specifically, just preaching), there is an option for Doug to just not participate and instead throw his money and reputation behind something he has more influence over. He's not 100% at fault but he sure as **** isn't zero. His followers tossed monies at CoinFlex because of his shilling, there are repercussions that go beyond personal responsibility that need to be taken account of. Maybe by admitting above zero he becomes more liable to lawsuits, idk.

agree hes at fault as he shilled something that was hazardous to his followers, but its a pretty tough spot to do proper dd, how many people in the world are experienced with risk management of perps and liquidation engines that can model this and create some sort of risk analysis of failure? probably a small handful already employed by major exchanges, certainly this stuff is well above dougs understanding of these products. I agree there is a point to maybe not shilling something you don't 100% understand what the risks are but id also say i would think he did his DD to the best of his ability, but that clearly was not enough. you can still be at fault for something despite doing your best to avoid it, i don't think those 2 things are mutually exclusive this isn't like middle school handing out participation trophies.

i don't think im dying on any hill but it just seems like there's a lot to be learned from this that people are missing and the pitchforks are out for the uninformed just wanting to pile on a mans downfall. this goes for everyone, for doug, for coinflex and other similar exchanges, and for people in general that are participating in cefi/defi and trading spot/perps/futures/leveraged products. In my eyes nothing was really obvious up until it happened, and an interesting parallel in defi is the whole solend/aave fiasco where whales had huge positions close to liquidation that undoubltly would have led to similar bad protocol debt in those platforms, along with the huge debate between just letting it happen because code is law and actually saving the protocol and its users. this is obviously a different situation as its a cex, but clearly management decisions were made recently that led to this issue.

Do you still consider flexUSD to be a buy as you stated on Twitter a few days ago?

i have never held flexusd and never said it was a buy lol. was just looking for liqudity arb

So basically, UnBanMe, you agree with everyone in here that Doug has responsibility for the fiasco (something he denies), but you just wanted to come on here and explain how smart you are. Lmao.

Why did he have pitchforks out for years when it came to others? He was relentlessly going after CryptoNick, a 17 year old kid shilling Bitconnect? Who do you think is likely to spot a scam and do a proper DD, Doug Pollk with his presumably team of advisers and friends that are "experts" in crypto or a high school kid?

hope you learned something today, you are welcome for my time

The mans downfall? Nice framing of Polk as the poor victim here. You shills are something else. He is totally to blame, there is no excuse or justification for shilling something that was clearly total bs with such extreme confidence to the point of offering 100-1 on twitter for it. He is either complicit in the scam or a total moron. You can choose.

I'd take it easy on the "downfall" - Doug will be fine. TBH the way he pushed it on all his pods, social media etc. confidently pretty much means he can never criticize others in the crypto space without also making fun of himself in the next breath. I actually assumed it is his company because he pushed it more than he ever has his other businesses. But he has Upswing, the Lodge, and his podcast - this past flaw will just make it more interesting, probably means I am more likely to listen to his podcasts.

Also, after all, Doug has always been the most conservative "advisor", talking about the need for diversification and not putting too much money into Crypto in almost every vid , if people followed his advice they have lost money on this, but not portfolio ruining money.

Dead on. Unfortunately we all know how this will go. Within a few days or weeks most in the poker community will forget all about it and Doug won't be called out by any in the poker media. Soon he'll be bragging about the latest cash game at the Lodge and will still get hundreds of likes for his tweets and nothing will happen to him.

He's basically a Madoff clone sucking in gullible people because he HAD a stellar reputation.

Wouldn't that make you the total moron for not making 100x on your money if it was so easy to know?

I don't think Doug is blameless here but your point of view is exceptionally ******ed.

Nah it would just make me smart for not paying attention to anything doug polk shills says regarding crypto. I'm sure you felt smart making that point though. lol.

While I respect your superior understanding of the financial matters at hand and even more, respect that you are being a good friend, you are talking past most of those with issues re DouglasÂ’ actions.

I donÂ’t see too many people claiming to know how Coinflex could meet their obligations. It couldÂ’ve been a scam, but after watching Mark LambÂ’s interview, I think things went pretty closely to what he described. The problem is that once he hitched his brand to Coinflex, Douglas opens himself to the fair questions of:

Where you in on it, or just too ******ed to calculate the high risk of this Ambassadorship after promoting a very specific image? Once you saw things getting bad, what did you do, if anything, to help stop the bleeding? And now that things have really hit the fan, will you face the music and accept your role and offer an apology to the community, or will you take the low road and do what youÂ’re doing now? Namely, claiming DD was done, not answering the tough questions, and failing to take responsibility for your role or offer up a sincere apology. It sucks that he wonÂ’t make any money here. Feels bad man.

Everybody makes mistakes and depending on the severity, should be given a chance at redemption. But that road does not start by putting out a self-serving statement that, denying culpability for his role, agreeing to answer questions but only cherry picking a few of the easiest questions, being opaque, and a lack of remorse.

He has thus far refused to answer questions about Brad Owen, Liv Boeree and their involvement in Coinflex, if any, despite The Lodge hosting the Coinflex crew and CoinflexÂ’s Co-Founder posting a pic of them all playing together as his top tweet and tagging Liv and Brad.

Why havenÂ’t questions about the period between 6/23-6/28 addressed? That was a crucial point when he may have been able to exert some influence over resuming partial redemptions, to the degree to which Coinflex was able with the $90mm they have on hand. Roger defaulting and itÂ’s catastrophic effects are on the risk management team and Mark Lamb. But from the sound of things so far, the only thing Douglas acted on from 6/23 onwards was covering his own ass while neglecting to pursue partial withdrawals to account holders.

After watching Lamb face the music, offer sincere apologies for their poor risk management, and vowing to work around the clock to right the ship, he earned a lot more respect than the guy who just jumps ship, complains he might not make money, and admits no fault. He would skewer another poker pro for doing much less.

As far as “chirping from the sidelines” I’m perfectly willing to chirp in his face with a mic if he’s got the cajones to face an open interview with no questions barred, like Mark Lamb did. He can complain about the Sarah Herring interview with Bryn, but will he even do an interview himself? The guy loved to dish it out; surely he should be able to take it?

I donÂ’t know much about him before the last 10 years. Everybody gets knocked down but he hasnÂ’t gotten back up. Maybe lessons about character and dealing with adversity werenÂ’t a priority in his family.

In mediating a whole lot of bad debt for 2p2ers, there wasnÂ’t much chirping done from the sidelines. And in that same pro-active spirit, I wouldÂ’ve gotten on a flight to Dubai and done everything I could have to convince Coinflex to resume payouts, on some level, before I jumped ship. Because my name wouldÂ’ve been attached to it and I value that more than money.

I wouldnÂ’t call this a scam as much as a failing business and DouglasÂ’ video statement sounded much like the Lederer Files after Full Tilt went down. If you canÂ’t understand why the pitchforks are out, crypto-fi might be in your wheelhouse, but maybe stay away from public relations

Guys, why are we still discussing this? It's yesterdays news, Doug has already moved on

Actually, it feels very much like communism. Created by idealists, embraced by intellectuals, wanted by people to fight the rotten aspects of capitalism, quickly overtaken by opportunists who for their own privilage are sending people to financial GULags.

seems like DP may (or may not) be okay legally, but that doesn't absolve him of some responsibility for actively promoting an entity that appears to be going under

"hey guys... I asked a couple people I know, that are also crazy about crypto and crypto-related stuff, about the guys at CoinFlex and they said they seemed like righteous dudes so I went all-in on the hype train to my followers, hoping to make some extra cheddar... guess I had a bad read... oops! no harm, no foul"

idk, maybe should have asked your legal/accounting team review some actual detailed info... and if CF wouldn't provide that, consider whether it's worth risking your rep on them

truth... it feels like we're in the late 60s/early 70s again, with a bunch of disappointed hippies... instead of their idols being assassinated, their idols took them for a magic carpet ride and then pulled it... free love, free stim, free crypto yield

This is correct.... the 'due diligence' seemed to be confirming that the guys involved hadn't previously scammed anyone or weren't criminals. Not that the magical 20% interest paid every 8 hours made sense or was at all possible

Absolutely remarkable Doug thought this was legit (although i do believe that somehow he did). At the same time anyone who got involved is a greater fool so the world keeps turning

I wonder if he's getting bombarded about this on twitter, like my boy Gary Gensler does about numerous finance issues.

Appreciate this Balbomb. Hope you have been doing well over the years.

I cant answer this. I've said what I'm legally allowed to. I think it is probably easy to understand why that is the case.

Because when I realized something was wrong, I resigned and made a statement. I didn't keep wearing a hat of the company 8 months later.

This is kind of tilting because I've seen this over and over again.

The ad DID NOT "Gurantee" any returns. It offered a variable rate based on market conditions. There was no promise of a specific rate.

That rate was advertised as 5-20% at different times over the last 7 months. 5% return on your money is not thar difficult to find in other places.

The way that money was made was clearly presented as the interest on their repo market.

The reason this went under WAS NOT because the premise is obviously a scam. This went under because coinflex did not do what they said they would and have their positions fully collateralized.

There is a huge difference between those 2 reasons for the problems. People seem to knowingly/willingly interchange those two because it's way more attractive to say "guaranteed 20% obvious scam ponzi lol" than "5-20% variable rate based on repo market interest which would have been fine, buy they did something extremely irresponsible and allowed someone an uncollateralized 47m position that jeopardized the business."