Exclusive: Coins.ph CEO Addresses Capital Gap and Deficit Concerns, with Founder Weighing In
Coins.ph CEO Wei Zhou has issued a fresh response while the company’s founder Ron Hose has now also weighed in with regards to BitPinas’ report detailing a ₱2.5 billion ($44 million) capital gap and XRP deficits revealed in the company’s SEC-submitted audit for December 31, 2023.
- While Zhou emphasized a capital infusion to address the issues, the auditor, as stated in the Audited Financial Staments (AFS), maintained concerns about the company’s ability continue as a “going concern” despite the infusion.
- Important Note: Although Zhou referred to a “capital infusion,” the auditor described an attempt to increase the capital of Betur (the licensed Coins.ph entity) by converting the debt to Betur’s parent to equity. There is no infusion of additional cash in what is described.
This follow-up includes reactions from Zhou, founder Ron Hose, and industry voices, fueling further debate.
Below are new developments that happened after the story is published:
Table of Contents
Writer Statement
On Sunday, Dec. 8, 2024, this writer posted on social media calling out attacks that accused this outlet of running a paid hit job (the article), and the request of one member of an organization to slow down the coverage of Coins because it makes people scared to try out crypto:
A version of this was also shared on LinkedIn.
Coins.ph CEO Response:
The Coins.ph CEO Wei Zhou replied to this writer’s tweets which he also shared on LinkedIn (where the writer also shared a version of the tweets). We are quoting the comment in LinkedIn for this article:
“I do not know whether this is a hit piece or not, and it is not for me to judge. I do find it funny that you guys selectively pick out financial data to make things look terrible. And now, you are playing the victim because people are criticizing your coverage as “fear mongering”?
Wei Zhou, CEO, Coins.ph
We had bad financial performances in 2023, as did much of the industry, but we did things the right way, and now we are both thriving and financially strong.
My mission from day 1 is to bring the best crypto product to our users here in the Philippines and to use crypto to empower and enrich our users. I have been very transparent about what we are building, the challenges we face, the resources we have, and our shared vision for the future.
All customer cryptocurrency balances within Coins are fully backed and audited, the gaps are only timing differences at the time of the audit.
We stay the course and continue to build and use crypto to empower people financially not just here in the Philippines but all over the world.
There is telling the “truth” and there is taking numbers and comments out of a 60+ audit report to sensationalize coverage.
Wei Zhou, CEO, Coins.ph
You failed to report that the board and the auditors addressed the deficit with a 1.2 bn equity injection from the parent company. (Page 2, Notes to the Financial Statement).
I am available 24/7 for comments, but you never asked me to comment on the article. My team reached out to you to give our statement after we heard rumors about the article.
The 2.5 bn cumulative deficit is a VERY misleading headline! This is just Betur’s total losses since founding, the equity deficit was 666 mm, which was made positive with the aforementioned 1.2 bn equity injection from parent.
Coins.ph Founder Chimes In
In a highly charged comment on this writer’s post, Ron Hose, the founder of Coins.ph also shared sentiment challenging the current CEO’s reply:
Sorry Wei Z. / Coins.ph, your response is a complete cope out.
You are not being called out for having losses in 2023, you are being called out for allegedly 1) having your auditors call out “MATERIAL UNCERTAINTY GOING CONCERN” on your AFS, – AND. 2) having a ₱192 deficit in XRP customer deposits that consumers trusted you with.
If these allegation are indeed true, they are very serious.
The fact that after a full article on BitPinas AND this gracious post you still think you can gaslight the entire crypto community here and pretend nothing is wrong (rather than address the issue), should be a huge red flag in and of its own to anyone still holding funds with Coins.ph. (FD: I withdrew my balances a long time ago).
Side note: I am honestly perplexed that Bangko Sentral ng Pilipinas has not stepped in on this already.Ron Hose, Founder, Coins.ph
Context: Ron Hose founded Coins.ph in 2014 and sold it to Gojek in 2019.
In a reply to Ron Hose, Wei Zhou stated:
“We are doing much better than when you left. Thanks for asking and keeping track. We will carry on your mission to not only bring financial inclusion but also bring financial empowerment to the Philippines. Bitcoin is the most equalizing force in the history of money, and you are true pioneer in opening the access to it in the Philippines. Come by the office, we have a Ron Hose room.”
Wei Zhou, CEO, Coins.ph
Addressing some of the CEO’s comments to this Writer
BitPinas failed to mention that Coins addressed the capital deficiency: False
Coins.ph CEO said on Twitter:
Response: Our article did mention that Coins.ph addressed the capital deficiency. Here’s a screenshot from the article:
Regarding XRP: BitPinas also noted that the auditor accepted the management judgement that the XRPs locked in other exchanges can still be recovered.
Please note that BitPinas is quoting the auditor. The above is not the statement of BitPinas but the statement of the auditor.
- And finally, the auditor stated that despite Coins addressing the deficiency, the financial auditor said it did not change its opinion in respect of it, the opinion being the “Going Concern” of Betur Inc’s ability to continue.
BitPinas wrote a misleading headline: False
- The exact title: Exclusive: Financial Auditor Flags ₱2.5B Capital Gap, XRP and Crypto Deficits at Coins.ph, is lifted directly from the financial auditor’ statements ‘s as stated in the AFS.
So Why did BitPinas not lead the article with the statement from Wei Zhou?
- We lead with the AFS because it a public record, submitted by Coins.ph to the SEC.
- Regarding Wei Zhou’s capital injection statement: The Coins team did not provide proof of this.
- Plus the financial auditor stated that this did not change their opinion.
Why did BitPinas not include the fact that Betur is just one of the businesses of Coins.ph?
- Betur Inc is the licensed entity. Therefore, it is the one subject to BSP capitalization requirements, and must also therefore have the customer funds.
Final Words From Coins.ph CEO Wei Zhou Just Before this Article is published:
In response to Ron Hose, Wei Zhou said in the comments section on LinkedIn:
“I welcome everyone to go read the audit report in full. Its on the SEC website. All I am saying is that the headlines are misleading. It positioned a shitty 2023 financial performance into “fearmongering” headlines about solvency. Not cool.”
Wei Zhou
In response to Rafael Padilla in the comments section on LinkedIn, Wei Zhou said:
i prefer the public forum over screaming “look at me” on a pedestal. I did not say this is an adverse report. We had a shitty financial year in 2023 and there is no denying that. I am saying they portrayed misleading headlines by selectively picking out words and numbers from the audit report.
Wei Zhou
To which Atty. Padilla replied:
“I don’t think you can blame Bitpinas if they rely on this public document as a credible source of information of what’s going on inside your company.
But if you think that Bitpinas’ headline was somehow misleading, just publish the AFS for free so people can make their own assessment on whether this issue is serious or just a FUD.”
Rafael Padilla
This is a developing story: Exclusive: Coins.ph CEO Issues New Response to Capital Gap and Deficit Issues as Founder Chimes In
