Teams behind the Floki protocol and Bitget crypto exchange are embroiled in accusations of market manipulation following the listing and subsequent delisting of TokenFi (TOKEN), as reported in a social media post by the Floki team and a Bitget blog post on October 31.
Floki’s team alleges that Bitget listed the token prematurely, dubbing it a “fake token.” In contrast, Bitget claims that the Floki team is suspected of maliciously controlling initial liquidity, implying market manipulation.
Floki’s team had submitted a proposal to the Floki decentralised autonomous organization (DAO) on October 18, outlining plans for a staking program with a reward token aimed at a high-value industry.
Simultaneously, they were in discussions with centralized exchanges for TokenFi’s listing. While the DAO proposal did not disclose the token’s name or the purpose of the reward token, the information was supposedly shared with multiple centralized exchanges.
The Floki team urged these exchanges not to list the token until at least seven days after its launch to adhere to DAO-established governance rules, which they claim all exchanges agreed to.
Nevertheless, Bitget allegedly violated this agreement by listing TOKEN before its official launch, rendering the token unavailable for trading.
On October 26, Floki issued a warning that any current TOKEN listings on centralized exchanges were unauthorized, though Bitget was not explicitly named in the warning.
TokenFi was scheduled to launch on October 27 at 3 p.m. UTC, with an initial price of $0.00005011, eventually soaring to $0.005850 (a remarkable 11,574% gain). At the time of this report, the price had surged even further to $0.006053 per coin.
Floki claims that Bitget listed TOKEN without having any tokens to sell, causing withdrawal processing issues and a $20 million liability for Bitget without TOKEN assets to offset it.
Bitget allegedly attempted to purchase tokens from the TokenFi treasury at a 90% discount to market price, an offer that was declined. Bitget then issued a “delisting” statement in response to this refusal.
Bitget’s statement asserts that TOKEN was listed on October 27, 2023, but significant price fluctuations were observed post-listing.
The exchange suspected market manipulation by the development team due to limited initial liquidity, with only $2,000 added to the token’s pool.
Bitget also cited an unclear token economy and vesting schedule as reasons for discontinuing TOKEN.
Bitget offered to buy back TOKEN at its peak price before delisting, covering any losses that occurred pre-delisting.
However, investors who acquired TOKEN from Bitget would not benefit from post-delisting token appreciation. Floki’s team refuted Bitget’s claim of providing only $2,000 worth of initial liquidity, stating they had nearly $2 million in liquidity in each of the two TOKEN pools.
They posted a screenshot from DEXTswap displaying the available amount, though it was current liquidity rather than the initial liquidity mentioned by Bitget. Notably, TOKEN’s initial liquidity could not be confirmed by Cointelegraph at the time of this report.
This incident echoes recent token-launch issues, including losses incurred by BALD token on Base and the launch of Pond0X, both highlighting the risks associated with cryptocurrency investments.