There's been a fair amount of chatter scattered across a couple of threads now about what looks... kind of suspicious to me at this point.

basically it seems like the BCH that should be backing FlexUSD may no longer be there and someone went and tried to sell it on Binance. this unsurprisingly caught the eye of folks in r/btc.

i first stumbled into this yesterday when i was poking around reddit trying to figure out why FlexUSD was de-pegging so hard all of a sudden. i came across this thread about the mysterious appearance of a bunch of out of the money buy side orders appearing on all the exchanges at the same time by /u/big--if--true.

important note: reading the threads that touch on this subject it seems clear that some people have unknowingly conflated two separate piles of BCH that CoinFlex is supposed to maintain custody of:

1. BCH locked up for smartBCH. the BCH locked into the smartBCH is indeed still visible on chain. SAFU, as they say.
2. BCH used to maintain the FlexUSD peg. this pile of ~$90M of BCH that lived in a perpetual BCH/USDC on CoinFlex doesn't seem to be around any more... and Flex USD is suffering.

the conflation has lead to some complacency, because the smartBCH capital is clearly in the wallet where it's supposed to be. it's just the FlexUSD chunk that's missing.

THE CHAIN OF EVENTS

as has already been noted in other threads, the fact that all these events happened in sequence is... concerning.

1. A marketing blitz from CoinFlex promising impossible returns. Seems like it might have been a cash grab, given what came next.
2. Coinflex halting all withdrawals yesterday morning
3. Ensuing rapid de-pegging of FlexUSD yesterday, followed by CoinFlex either killing the market or killing the blockchain. not 100% clear yet.
4. The sudden appearance in the Binance hot wallet of a pile of BCH that was being sold that should have been backing the FlexUSD peg. And it was being sold off, slowly but actively.
5. /u/i_have_chosen_a_name then pointed out in this sub how fishy it was that the amount of BCH being sold from the Binance hot wallet almost exactly matched how much seemed to have been removed from CoinFlex's perpetual BCH/USDC that kept FlexUSD pegged.
6. at the same time there appeared a huge amount of out of the money buy orders for BCH unlike the members of this sub had seen along with a bunch of wash trading of BCH, all of which would have contributed to obscuring the Binance BCH sale that /u/saylor_moon noticed. (see /u/rashaniquah's linked comment below; he did a seriously deep dive on this)
7. The sudden reappearance of Mr. Coinflex himself in this sub doing what looked like diversionary commenting.
8. Somewhere after theses posts got started here in r/btc the BCH stopped being sold. most of it (i want to say 400K BCH? but i can't find the comment) was transferred out of the Binance hot wallet. that information is somewhere here in r/btc but i failed to dig it up. it's almost as if someone was monitoring reddit and realized they'd been made by the fine redditors of this sub who seem to cherish and protect the larger BTC market, at which point they retreated from the sale.
9. /u/rashaniquah running some numbers and finding $18M funneled out of CoinFlex, which he attributes to "shitty accounting"?
10. FlexUSD mysteriously vanished from CoinMarketCap at some point. poof. note that CoinMarketCap is controlled by Binance, the same market that was being used to liquidate the BCH.
11. rumours i've heard on other social media channels that Mr. CoinFlex is suppressing discussion of the BCH that backs FlexUSD in CoinFlex's telegram channel... suppressing it or trying to divert it back to discussion of the BCH that is provably locked up in smartBCH contracts.

there might be more to the story scattered around social media that i haven't seen; feel free to fill in blanks. and also r/btc seems to be pretty good at that "on chain" style of research. if anyone has those skills and the time to jump in..

pieces of this have come from a bunch of people: /u/jbrev01, /u/TheFireKnight, u/big--if-true, and others...