0-fee Cryptocurrency Exchange Cobinhood Cuts Staff Amid Exit Scam Accusations

Zero-fee Taiwanese cryptocurrency exchange, Cobinhood, has come under fire this week, as the crypto community spotted a potentially ongoing exit scam. This comes after an official statement earlier this year, where Cobinhood spokespersons said that CEO and founder, Tai-yuan Chen, had left the exchange due to ‘emotional instability’. The exchange also has plans to reduce it’s team size to just 30 people ahead of its parent company, Cobbingham Digital Finance Co. Ltd. filing for bankruptcy.  

Following the proliferation of these rumors, COB, the native token of Cobinhood, has declined in price significantly, now trading at around US$0.002, and losing half its market cap since the 20th of May.

This news follows a huge sell-off of DXN tokens, the native coin of the Dexon Foundation and sister company to Cobinhood, via the exchange on the 20th of May.  Raising over US$3 million during the DXN token sale in April 2019, the tokens were unlocked on Cobinhood exchange and subsequently sold-off so rapidly that investors didn’t even receive their ICO tokens.

Shortly afterwards, the exchange was declared bankrupt and quickly appointed liquidators, which the wider cryptocurrency community have taken as a sign of the team exit scamming. As a result, DXN token value fell sharply, trading at just US$0.04 down from US$0.15 in just a few hours.

FXStreet reported on the 24th of May that Wei-Ning Huang, one of the founders of both the Cobinhood exchange and the ill-fated Dexon Foundation, took to Telegram to tell the community that the “Taiwan company is being restructured, but everything is working as usual.”

Explaining a cause for a huge drop in DXN token price, Huang said “We unstaked some nodes owned by the foundation to cut the operation cost. We did not dump any foundation owned DXN tokens.” however, the community is less than convinced. There is yet to be an official response or press release on these issues from the team, with many community members left in confusion about the exact situation that is unfolding. However, team members have assured the community through Telegram that although Cobbingham Digital Finance Co. Ltd has filed for bankruptcy, the exchange itself won’t ceased trading. In any event, the handling of these issues could have been performed better.

 

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