Crypto Exchange Bibox Canceled Staking’s IEO Token Sale Over Conflicts of Interest
Cryptocurrency exchange Bibox canceled one of its first four initial exchange offering(IEO) token sales on Monday, just two hours before the scheduled start of the IEO on Monday.
The Estonia-registered digital asset suspended the listing of Staking(SKR), a self-claimed decentralized asset management platform, which got ready to kick off its token sale on Bibox’s IEO platform, dubbed Bibox Orbit, at 10:00 A.M., April 22(GMT+8) amid questions over conflicts of interest.
The exchange said in a statement which was released two hours before the token sale event that “ Given the Staking project is unable to control over-the-counter token and token outflowing, after through discussion with the team and taking communities’ interests into consideration, Bibox Orbit team decided to suspend SKR listing.”
Bibox did not specify what is “token outflowing”, but it added in a subsequent post that the SKR team failed to control the large amount of its off-site supply. To put it simply, the team privately distributed a major portion of its tokens to investors.
The two parties were soon engaged in an intensifying feud. Staking Foundation, the entity that launches the Staking project, accused the exchange of breaking its promises over the withdrawal and deposit limits for the crypto and excessively intervening the secondary market. The Staking team told the Chinese media outlet Deep Chain that Bibox had urged them to pay “protection money” of $1.55 million on Sunday night.
Later on Monday, Bibox defended itself against what it called “ false accusation” from Staking,saying “We are very sorry for the false accusation made by SKR team, and we reserve the right to pursue legal responsibility.”
According to the team behind Staking, it was their own decision to suspend the listing of SKR token on the IEO platform, instead of being abandoned by the exchange.
Bibox rushed to launch its IEO platform in early April in an effort to profit from the rising hype around IEOs. The exchange claimed in a blog post on April 21 that the first four IEO projects with SKR included be launched this Monday. Except for SKR, the other three projects have completed IEOs and their tokens have been listed on the exchange today.
Just like with ICOs, many blockchain startups issuing tokens through IEOs don’t yet have a product and these projects look more like a scam. We can hardly find Staking-related information online. The project does not have a website, and the team or founder is anonymous. The project appears to make quick money through IEO and to defraud naive investors who are still dreaming of digital gold.
Although IEO platforms , serving as underwritters, promise to review projects and offer tokens to vetted customes, vetting process varies across exchanges and the promised due diligence sometimes is nominal. Investors should definitely stay alert for IEOs, especially those launched on smaller crypto exchanges.