Coineal exchange is holding the fee paid to it by crypto project CYBR hostage, according to the CEO of the affected project. CYBR head Shawn Key has claimed that since cancelling the company’s Initial Exchange Offering (IEO) last Tuesday halfway through the fund raise, Coineal has refused to hand back the fee they were paid to host the IEO after halting it due to “a large risk” associated with continuing with the token raise and the resultant listing.
Coineal ran the CYBR token offering between June 23 and July 2, selling approximately 56% of the available tokens according to their data, worth around $2.2 million. They then cancelled the token listing, a decision they said was taken to protect customers:
Due to the insufficient preparation of CYBR (Cyber Token Ecosystem and Utility Token) project team and the inconsistencies in the cooperation process between CYBR project and Coineal, our risk management team has reassessed the value of this presale according to the current situation. We have concluded that there is a large risk with continuing the CYBR follow-up listing. In order to protect the interests of investors, Coineal decided to cancel the CYBR presale and listing of CYBR token and return the assets of users who participated in the presale.
IEOs have grown in popularity since Binance and Bittrex began offering them back in March, with the practice now being adopted by smaller unregulated exchanges, which comes with bigger risks for projects and customers alike. In fact, Bittrex’s first IEO ended before it had begun when the token was revealed to have major “trust and integrity” issues.
CYBR Bites Back
Key says that CYBR didn’t receive the funds from the IEO, and a demand to do so was met by Coineal cancelling the offering in its entirety, keeping the listing fee into the bargain. To make matters worse, Coineal also refunded customers who bought the token, ensuring that CYBR would not receive a penny in crucial development funds. A war of words has since broken out, with Key describing Coineal as having “unscrupulous” business practices and not having the correct licenses to operate the offering, which makes you wonder why he wanted to deal with them in the first place. It’s almost like the IEO field isn’t 100% legitimate…