Doug Polk announced on Saturday that he would be stepping down as ambassador for CoinFlex. The last few weeks has seen CoinFlex accrete worrisome headlines after it instituted a withdrawal freeze.
Polk’s resignation announcement comes in the form of an eighteen minute YouTube video. In the video, posted to his Doug Polk Podcast channel, Polk does his best to clear the air around CoinFlex.
“There are couple of things here that are really important,” Polk says near the start of the video. “Why I think I need to make a statement, for starters — I think my audience has always valued that I am honest and direct with them.”
He then lays out the known-knowns and known-unknowns of the CoinFlex situation.
“The reason we’re in this situation is that CoinFlex said these assets were fully collateralized and they were not,” he says. On June 23, CoinFlex paused withdrawals.
Polk seems to be particularly piqued by the fact that he had to discover the pause second-hand, learning about it with us proles on Twitter.
According to Polk, this was when he started talking to a lawyer about getting out of his contract. Pausing withdrawals is, as he puts it, “a giant red flag.”
To clear his name, Polk talks us through his due diligence process and how it was that he was duped by CoinFlex.
He is also, understandably keen to tease out exactly what his involvement in the company was.
The video is admirably clear and condemnatory of CoinFlex’s actions, but Polk is very clear that in his view, he was not at fault. He does not own the company. He does not run the company.
He also points out that he is also a victim here. It sounds like Polk may have been paid in CoinFlex tokens, and he explains that if CoinFlex doesn’t pay out their withdrawals then he will have lost money on the deal. In other words: at least he had skin in the game.
Polk’s CoinFlex problem
Having explained what his role with CoinFlex was, Polk then breaks down some of the infighting and speculation that is underway as the public tried to parse CoinFlex’s shenanigans. He speculates that there may have been insufficient segregation of assets and that the assets may have been insufficiently collateralized.
Polk then moves on to lay out what he thinks CoinFlex should do going forward.
He wants a balance sheet and a warning on the website — the website still has a register button and is apparently allowing deposits.
He also calls out the false optimism of CoinFlex, suggesting that instead of pretending everything is fine. In his opinion clarifying what the worst-case scenario is, counter intuitively, the more reassuring option, putting an end to the more extreme rumors in the market.
Last of all, Polk ends the video on a semi-apologetic note:
“I hope that CoinFlex can figure out a way to get the money and get people paid back. But whether they do or not, I want to say sorry to the viewers of this channel that have been put in harm’s way… because of the actions taken by CoinFlex.”
You can watch the full video below, or on Polk’s YouTube channel:
Featured image source: CoinFlex