In the latest in stupid news from the world of cryptocurrency, many are claiming the no fee cryptocurrency exchange Cobinhood, has just exit scammed its users. Although rumors abound and nothing is quite clear at this point, what we do know is that Cobinhood’s partner company DEXON’s token is tanking, co-founder Popo Chen, has left Cobinhood due to “emotional instability and liable personal behavior” and the company itself admitted they are running out of funds and have been forced to reduce their staff to just 30 people.
All of this news pales in comparison to the fact that DEXON’s token, DXN, has been unlocked, causing a massive sell off of the asset which sent prices plummeting to the floor. The collapse of DXN sent shock-waves through Cobinhood, as their parent company, Cobbingham Digital Finance Co, Ltd, has filed for bankruptcy as of May 20th. Many are rightfully suspicious of the inner workings of Cobinhood and DEXON as just last month the DEXON ICO received over 3 million USD in funding. May 20th was the day DXN was supposed to be unlocked, however the founders likely knew of the impending crisis, unlocked the token for themselves, sold off in an effort to get out of the trainwreck with a little cash in their pockets and left investors holding the bag.
With many declaring ICOs in general a scam, it shouldn’t come as a surprise that Cobinhood was at the top of the pyramid. The company isn’t only an exchange, they are also known for helping to launch new ICOs, as well as having launched their very own ICO through DEXON, and their own token, COB. After the initial sell off of DXN by the founders, the price dropped to 0.02USD, but quickly rebounded on Cobinhood and is hovering around the 0.12USD mark. COB followed with a sharp decline of its own, losing 60% of its value in just 36 hours.
As of now, Cobinhood is claiming that the bankruptcy of its parent company will not affect the operations of the platform and they are still allowing deposits and withdrawals, so many users are scrambling to get their funds out as soon as possible. Whether or not they remain operational still remains to be seen, especially in light of recent layoffs.
Written by Joseph Imbruglia