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Reportedby Cointelegraph, Floki protocol teams and Bitget exchange have accused each other of market manipulation after the protocol token, TokenFi (TOKEN), was listed and delisted by Bitget.
The Floki team accused that Bitget listed the token before it was launched, claiming Bitget listing as a "fake token", while Bitget claimed that the Floki team was "suspected of market manipulation" by maliciously controlling the initial liquidity.
The Floki team said it submitted a proposal on October 18 to the Floki decentralized autonomous organization (DAO) to launch a staking program with a reward token. Meanwhile, the team was talking with centralized exchanges to list TokenFi. The name of the token was not released in the DAO proposal, and the team did not state what the purpose of the “reward token” would be. However, they claim that this information had been revealed to multiple centralized exchanges.
According to the team, they told centralized exchanges not to list the token until at least seven days after it had been launched because doing so would violate governance rules established by the DAO. All exchanges agreed to this stipulation, the Floki team claimed in its post. However, they claimed that Bitget violated this agreement. Instead of waiting seven days to list TOKEN, they listed it before it was launched. This meant that the token was not available for sale at the time it was listed on Bitget, the team stated.
According to the Floki team, Bitget listed TOKEN without having any of it to sell to its customers. As a result, it was unable to process withdrawals. They claim that Bitget ended up with a $20 million liability to customers and no TOKEN assets to hedge this liability.
Floki claims that Bitget then attempted to buy tokens from the TokenFi treasury at a 90% discount to its current market price, which the team refused. Bitget allegedly released its “delisting” statement in response to this refusal.
According to Bitget’s post, TOKEN was listed on October 27, 2023. After the listing, the Bitget team noticed that TOKEN had “significant price fluctuations.” Because of the large fluctuations, the exchange suspected the development team of “market manipulation by maliciously controlling the initial liquidity.” Bitget claims that only $2,000 worth of initial liquidity was added to the token’s pool. They also claim that they discovered “an opaque token economy and an unclear vesting schedule,” which made continuing to offer TOKEN untenable.
In its statement, Bitget offered to buy back all the TOKEN it has sold to its customers.
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