Cobinhood founder Popo Chen has taken to Medium to explain the closure of the platform, which was accused of exit scamming after it ceased operating in May last year following the Dexon (DXN) token sale. Chen states that legal reasons prevented him from explaining the situation sooner, but that there was no exit scam or bankruptcy application involved.
“I hereby declare: This is no exit scam. The company didn’t file bankruptcy either.”
Cobinhood made headlines last year when it was revealed that Chen had stepped aside while an investigation was carried out following claims of financial misconduct. This happened soon after the platform hosted the DXN IEO, which Chen was also CEO of, which dumped upon listing. This combination of events was followed by rumors of bankruptcy filings and mass redundancies, and the lack of comment from Chen only exacerbated things:
Classy exit scam from @COBINHOOD & @dexonfoundation (same company). After raising $3M just last month (!!!), they unlocked all tokens, dumped on the market (!!!) and announced that they appointed a liquidator. Remember these people $DXN #Cobinhood $COB https://t.co/xUGJiUQBrr pic.twitter.com/ZUPyP2Bhg7
— TSS (@SandorReport) May 20, 2019
“Complicated and Unfortunate” Events Led to Closure
Chen explains that due to his removal and the investigation he was “not allowed to comment in public” on the rapidly spiraling events, calling them “complicated and unfortunate”. Contradicting suggestions that he was forced from his position, Chen says that he instead agreed to cooperate with the investigation as he knew the accuser, and institutional investor, had been “misled by false info”, although this nevertheless had a very severe side effect:
However, as a result of weeks of public disputes, COBINHOOD Ltd. had to announce its suspension to the authority on May 20th, and all its employees need to be legally laid off.
This happened right after the DXN token sale, which only exacerbated the exit scam claims, although Chen maintains that the team didn’t sell their DXN tokens, which are now worthless.
Cobinhood Mark II?
The Cobinhood that Chen created is now gone, with a new version set to open on February 10 according to the website, although Chen states that, “It does take a while for us to go through all possible solutions of keeping the company running, resolving legal issues and disagreements between investors, then settling all the employees.”
Whether Cobinhood can re-open, either within this time frame or at all, will only be known in time, but at least there is now clarity on the matter, even if it does consign Cobinhood, in its initial form at least, to the trash bin of crypto projects.