The Taiwan-based Crypto exchange Cobinhood shuts down to audit user accounts. But it seems only temporarily. The company had remained mostly silent for the past eight months. Hence, rumors circulating it may have bankrupted or run away with user funds in an “exit scam”. Will the platform be reopened for trading or is it really an Exit scam?
13 January, 2020 | AtoZ Markets – Crypto exchange Cobinhood has ceased operations to audits its clients’ balances. According to a “shutdown notice” on Friday, Cobinhood stated that it would allow users to recover their assets after completing its investigation on February 10. Rumors abound, and nothing is clear enough at this point. It is warning customers of a “permanent loss” if they make deposits starting from January 10.
Cobinhood Shuts down, Claims it will Audit User Accounts
Cobinhood have fallen into financial difficulties due to the bear market. Some people in the market speculate that the Crypto Exchange is planning a possible exit scam. Since, the company had remained largely silent for the past eight months. And rumors circulating it could cause it to fail or run away with user funds in an “exit scam”. Unfortunately, exit scams has been occurring more often in the crypto industry. Just recently, in December 2019, there were reports of a potential exit scam by HEX.
COBINHOOD Exchange is shutting down and auditing all accounts' balances from Jan 10 to Feb 9 in 2020. It will be re-opened on Feb 10, 2020. All COBINHOOD users can then retrieve their funds accordingly. Please DO NOT make any deposits; it may result in permanent loss.— COBINHOOD (@COBINHOOD) January 10, 2020
Founder Popo Chen replied in a blog post in May 2019 saying it wasn’t like that, even if the company had problems. He claimed that a legal problem within the firm had forced him out for a short time. Shortly after, Cobinhood also had to be “suspended”, and the staff let him go. He said the exchange was “functional and unaffected”. In July, he further posted:
The company’s future plan is not yet final. Shareholders are in a positive negotiation phase, and we could reach a definitive solution that aims at the end of July.
He also acknowledged the problems with withdrawals at the exchange, saying they were due to an “unsolved withdrawal problem”.
Cobinhood Parent Company Filed for Bankruptcy in May 2019
In April 2019, an affiliate entity called the Dexon Foundation raised another $ 3 million with its initial exchange offer on Cobinhood. Both companies left their investors speechless after the Cobinhood parent company filed for bankruptcy in May. And the founders unlocked the token for themselves and sold huge quantities of DXN for their profit.
The continuing saga at Cobinhood went on as it fired co-founder and CEO, Tai-yuan Chen. It cited “emotional instability and personal behavior” that caused concerns for the safety of its employees.
While people were already furious to hear about the mess, the price of the Cobinhood’s native token, COB dropped from $ 0.15 to $ 0.0002. The value of the DEXON (DXN) token had also completely disappeared.
It remains to be seen whether or not if they are an exit scam. For now, Cobinhood hasn’t canceled its website, its Twitter account and other social media accounts. Also, the firm is still claiming that it will allow users to get their funds after a month. If you still want to invest or trade cryptos, please make sure that you do your due diligence and check also the crypto exchanges which AtoZ Markets team has reviewed.
What do you think? Is it only a temporarily shut down of Cobinhood? Let us know in the comments section below.