Crypto exchanges, poker giants and social media can be a recipe for disaster or just some drama depending on the day.
Earlier last month, we saw poker heavy weights Doug Polk and Phil Hellmuth take shots at each other, and the internet is still loving it.
Let's do a quick recap for those who are not up on their Twitter drama in the poker world.
Phil Hellmuth signed a deal with Bitcoin Latinum and has promoted the new crypto project through social media posts and wearing the brand's hat during poker events.
The project had a lot of hype around it, and Phil seemed to be genuinely invested.
Even Steph Curry was chatting with the CEO/Founder of Bitcoin Latinum, Don Basile, at a poker event in February.
However, after all the positive hype around the project, Bitcoin Latinum and Kevin Jonna were sued with some serious claims in February 2022.
The lawsuit filed in Detroit, Michigan, claimed that Bitcoin Latinum and Kevin Jonna committed securities fraud, wire fraud and fraudulent conversion of investment funds.
The issue was that Bitcoin Latinum, and Kevin Jonna were not registered with the Securities and Exchange Commission or any state securities regulatory bodies when selling the tokens.
The lawsuit alleges that Bitcoin Latinum offered a “pre-sale” on their website and that Kevin Jonna sold the token directly to at least three investors in Michigan.
The lawsuit alleges that Jonna and Bitcoin Latinum sold at least $540,000 of unregistered securities in 2021.
It also alleges that Bitcoin Latinum's claims that the tokens were trading publicly were misleading or blatantly false.
The counsel to the plaintiffs, a former federal prosecutor and SEC Enforcement Lawyer, Jacob Frenkel, said this about the suit:
The fraud that we allege against our clients has the characteristics of offering frauds that I pursued as a government lawyer. With so many people looking for ways to diversify into crypto and alternative assets and legitimate enterprises trying to enter the crypto space, it is conduct as we charge against these defendants that only contributes to the skepticism about cryptocurrencies.
Two days after the lawsuit, Bitcoin Latinum announced that the accusations were all without merit and that Bitcoin Latinum did not have a relationship nor received any investment from the plaintiffs.
Bitcoin Latinum also confirmed they are countersuing each individual for, without limitation, defamation, tortious interference with a business relationship and fraud, for not less than $1 Billion each for reputational and punitive damages.
In addition, Bitcoin Latium is also seeking sanction and potential disbarment of all attorney’s party to this action.
As of the latest update on March 31, 2022, the parties are in discovery, and there is no court date set for the trial as of yet.
Phil, for his sake, made it clear that he was a paid endorser but did not go as far as encouraging people to buy into the project.
Doug Polk has been highly public in his criticisms of Phil and his partnership with Bitcoin Latinum after news of the lawsuit circulated.
However, it turns out the company that Doug Polk partnered with, CoinFlex has its own issues.
In late June, CoinFlex froze withdrawals after one of its biggest clients went into negative equity.
The company paused all withdrawals from the exchange, citing “extreme market conditions and uncertainty involving a counterparty”.
For most clients, the exchange could liquidate the investor’s position in the case of negative equity.
However, this specific client had a clause in his contract with the exchange not to allow this to happen.
Instead, the agreement signed between CoinFlex, and the investor had this condition that required the investor to:
pledge stringent personal guarantees around account equity and margin calls in exchange for not being liquidated.
CoinFlex, for their sake, did not initially identify the investor.
However, they did note the following:
[The investor] is a high-integrity person of significant means, experiencing temporary liquidity issues due to a credit (and price) crunch in crypto markets (and non-crypto markets), with substantial shareholdings in several unicorn private companies and a large portfolio.
So, in response and attempt to raise money to cover the shortfall, CoinFlex introduced a new digital coin, Recovery Value USD, or rvUSD.
CoinFlex released $47 million worth of the coin, hoping to resume withdrawals once its accounts recovered.
In addition to an investment into the coin, those who purchase the new offering will receive 20 per cent interest on top of their investment.
Although they initially declined to name the investor as of July 11, CoinFlex confirmed to media outlets that it had filed legal action against the investor in Hong Kong.
As per the suit, CoinFlex hopes to recover $84 million from famed crypto investor and Bitcoin Cash proponent Roger Ver.
Ver declined to comment on the situation but reiterated previous statements that he does not owe money to CoinFlex; in fact, CoinFlex owes money to him.
We have not seen any documents to back up this claim, and Ver did not expand on his statement.
As of July 15, the CoinFlex was back up and running, with trading and withdrawals working.
So, what exactly happened between Phil Hellmuth and Doug Polk?
As the CoinFlex scandal continued to circulate and get bigger via Reddit and Twitter, Doug Polk posted a video on YouTube and Twitter announcing he was stepping down as a CoinFlex ambassador.
After this video, Polk saw an opportunity to throw a shot at Phil, which did not go as planned as you can see here.
Phil then piled on and responded to Doug here. He cleared the air about his dealings with LTNM and how he took zero money, only coins in the project.
Finally, Polk came back and painted the picture that he was the good guy as you can see here. He saw a sketchy action from the company and withdrew his support. While then putting the focus back on Phil and his continued sponsorship deal.
Although this could have kept going, both parties decided to move on from the heated exchange. So, what did we learn?
Well, to be honest, nothing.
Phil took an all- coin deal with LTNM and continues wearing their gear at poker events.
Doug Polk partnered with the exchange and got out of the deal when the exchange ended up doing something sketchy.
At the end of the day, LTNM is still a viable blockchain project; as Phil noted, he believes in the project, but it is a risky bet.
Until proven in court, it is only speculation, meaning we still have Phil rocking a Bitcoin Latinum, and Doug Polk can continue to poke the bear.
But hey, we all love a little drama on social media between two of the biggest names in poker, whether it involves cards or crypto sponsorships.