In a recent development within the cryptocurrency landscape, two prominent entities, Bitget, a crypto exchange, and the Web3 protocol Floki, have become embroiled in a heated controversy, accusing each other of engaging in market manipulation tactics. This unfolding drama revolves around the listing and subsequent delisting of the Floki protocol’s token, TokenFi (TOKEN), on the Bitget exchange.
The saga began when the Floki team, in an October 31 social media post, pointed fingers at Bitget, alleging that the exchange had listed the TOKEN prematurely, branding it as a “fake token.” In response, Bitget fired back with accusations of market manipulation, asserting that the Floki team had possibly engaged in malicious control over the initial liquidity.
The roots of this dispute trace back to October 18 when the Floki team submitted a proposal to the Floki decentralized autonomous organization (DAO) to launch a staking program. This program would introduce a reward token with the intention of targeting a trillion-dollar industry with significant growth potential. Concurrently, they were in talks with various centralized exchanges to list TokenFi, keeping the token’s name concealed in the DAO proposal and the purpose of the reward token unspecified. However, they claimed that this information had been disclosed to multiple centralized exchanges.
Floki Warns Against Unauthorized TOKEN Listings
According to the Floki team, they had explicitly instructed these centralized exchanges not to list TOKEN until at least seven days after its launch, to adhere to the governance rules established by the DAO. Supposedly, all exchanges consented to this stipulation, with one notable exception: Bitget. The exchange chose to list TOKEN before its official launch, rendering the token unavailable for trading at the time it was listed, as per the Floki team’s claims.
On October 26, Floki issued a warning to investors, cautioning that any current TOKEN listings on centralized exchanges were unauthorized, though they refrained from mentioning Bitget by name.
Bitget’s TOKEN Launch Sparks Controversy and Losses
TOKEN’s launch was initially scheduled for 3 p.m. UTC on October 27, as indicated in a social media post from the team. Coincodex data indicates that it was listed at an initial price of $0.00005011 and was effectively launched on October 28. The token’s price exhibited an astonishing surge, jumping to $0.005850, translating into an astounding gain of 11,574%. As of the latest available data, its price had soared even further, reaching $0.006053 per coin.
According to the Floki team, Bitget had listed TOKEN without possessing any of it to offer its customers, leading to a situation where withdrawals couldn’t be processed. As a result, Bitget found itself facing a staggering $20 million liability to its customers, without any TOKEN assets to offset this liability. Allegedly, Bitget made an attempt to purchase tokens from the TokenFi treasury at a discount of 90% from the current market price, but this offer was met with a refusal. It is said that Bitget’s decision to announce the delisting was a response to this rejection.
Bitget’s perspective, shared in their blog post, is that TOKEN was listed on October 27, 2023, and post-listing, the exchange observed significant price fluctuations. These fluctuations raised suspicions of market manipulation by the development team, who they believed had maliciously controlled the initial liquidity. Bitget asserts that a meager $2,000 worth of initial liquidity was added to the token’s pool and points to an opaque token economy and an unclear vesting schedule, which they claim made it unsustainable to continue offering TOKEN.
Bitget Offers Token Buyback Amidst Listing Controversy
To rectify the situation, Bitget extended an offer to buy back all the TOKEN they had sold to their customers. The peak price of TOKEN before its delisting, standing at $0.00605002 per token, roughly 121 times its initial price, would be reimbursed to customers. This implies that any losses incurred prior to delisting would be covered by the exchange. However, those who purchased TOKEN from Bitget would not participate in any subsequent token appreciation post-delisting.
The Floki team refuted Bitget’s assertion regarding the initial liquidity pool, insisting that they had provided nearly $2 million worth of liquidity in each of the two TOKEN pools. They presented an alleged screenshot from DEXTswap, displaying the current liquidity, albeit not the initial liquidity that Bitget had referenced. However, the contract addresses in the image were abbreviated, making it challenging to verify the pools in a block explorer. As of the time of this publication, the initial liquidity of TOKEN remains undisclosed.
This dispute over the TOKEN listing is not an isolated incident within the cryptocurrency world, as several token launches have witnessed significant financial losses for investors. For instance, the BALD token on Base experienced an 85% drop in value when its developer removed liquidity from the pool, though they denied responsibility for the price plummet. Additionally, investors suffered losses exceeding $2.2 million during the launch of Pond0X, which was marred by a faulty transfer function.
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