Bitget Sneaks Out and Sells “Air Coins”! Users Question the Authenticity of TOKEN Tokens
Floki, a meme coin project within the Dogecoin family and named after Elon Musk’s dog, launched a new meme project called TokenFi’s TOKEN tokens on October 27th at 3:00 PM (UTC). Although the opening of trading was delayed until 3:10 PM due to an unexpected event, the opening price of TOKEN tokens rose from $0.00005 to $0.03, an increase of about 600 times, creating an impressive performance.
Ahead of the official opening by the project, the exchange Bitget preemptively listed TOKEN tokens. However, after users made purchases, Bitget was unable to allow users to withdraw the purchased TOKEN tokens, leading users to question whether Bitget had listed “air coins.” In reality, Bitget did not actually hold any TOKEN tokens in stock.
As a result, users began to sell off the “air coins” they had just purchased. The trading price of TOKEN tokens on the Bitget platform significantly deviated from the on-chain price, reaching a difference of more than 3.5 times. The TOKEN tokens on Bitget remained at a negative premium compared to the on-chain price since the start of the sale.
After several days of processing, Bitget still couldn’t provide the withdrawal of TOKEN tokens. On Tuesday night, Bitget accused the Floki project of only holding less than $2,000 worth of tokens in the decentralized liquidity pool, implying that they manipulated the market price through “malicious liquidity compression.” In addition, Bitget also claimed that the project’s token economy was opaque, which led to their decision to delist TOKEN tokens and conduct a buyback with users at the highest closing price of 1 TOKEN = 0.00605002 USDT.
Bitget Sneaks Out and Shifts Blame? Project Questions Exchange’s Operations
In response to Bitget’s reply, the Floki project believes that Bitget is shifting blame and unwilling to take responsibility. They published a lengthy article on X (formerly Twitter) from the project’s perspective, disclosing the details of the incident.
The Beginning of the Incident: Bitget Sneaks Out and Lists Air Coins
Floki’s official statement states that on October 18th, they submitted a proposal to the decentralized autonomous organization (DAO) to release a new token. At that time, the new project and token name had not yet been decided through a vote by the DAO.
However, Floki had already announced this information to multiple centralized exchanges and reached an agreement with all of them not to list the new token on centralized exchanges within seven days of its launch. Floki emphasized that although all exchanges showed strong interest in the new token, they agreed to the project’s requirements.
However, Bitget not only violated this agreement by sneaking out but also listed a fake version 12 minutes before TOKEN was officially deployed and released. Floki stated that Bitget sold these assets without holding any TOKEN tokens in stock, and the reason behind this was that Bitget expected TOKEN to quickly depreciate after its release. At that time, the official could buy back at a lower price, purely for short selling.
The Exposure of the Incident: Bitget Digs a $20 Million Hole for Itself
However, the scenario did not unfold as Bitget had expected. After the release of TOKEN, its price rose, and users discovered that Bitget did not actually hold any TOKEN assets.
The total issuance of TOKEN tokens is 10 billion, and after Bitget realized their mistake, they attempted to negotiate with Floki. They hoped to purchase 1 billion tokens from the official at an off-exchange price with a 90% discount, which amounted to approximately $20 million according to the official announcement by Floki.
However, most of the TOKEN tokens were locked in Floki’s staking pool, with 50% in a 4-year staking pool, 22% in a treasury, 5% as a user reward mechanism, and 7% as TOKEN staking rewards. Only 16% of TOKEN tokens had market liquidity, which was insufficient to meet Bitget’s 10% demand. Therefore, Floki rejected Bitget’s purchase request.
Moreover, if Bitget were to actually make the purchase, it would cause the price of TOKEN to increase by 5 to 10 times, increasing the market demand for the tokens and making it even more difficult for Bitget to obtain enough tokens to repay users.
Handling the Aftermath: Floki Questions the Exchange’s Operations
Floki’s article expresses its dissatisfaction with Bitget in various aspects.
Firstly, in the beginning, when explaining the agreement with major centralized exchanges, Floki specifically pointed out that other larger and more mainstream exchanges agreed to and complied with the “seven-day agreement.”
They emphasized Bitget’s violation and sneaky behavior by highlighting that Bitget was the smallest exchange on the list of collaborations and the only one that broke the agreement and shifted blame.
Secondly, they attributed Bitget’s actions to improper operations. “After last year’s FTX incident, it is chilling to see such behavior from centralized exchanges that easily collect $10 million from users.”
Thirdly, they refuted Bitget’s accusation that Floki initially only provided $2,000 worth of tokens in the liquidity pool. They provided a screenshot from DEXTswap, showing that they provided $2 million in liquidity in two liquidity pools. However, the liquidity in the screenshot was real-time liquidity at that moment, not the initial liquidity, making it difficult to confirm Bitget’s accusation.
Lastly, they believed that if Bitget’s claims were true, they should publicly disclose their wallet address and provide users with information about the number of TOKEN tokens they hold and their historical records to prove their ability to repay TOKEN tokens.
Source:
Cointelegraph, Coinbase, Bitget Announcement, Floki – X
Proofreading Editor: Gao Jingyuan