Bitget, Floki groups accused each other of fraud after the token list

After the protocol's token, TOKEN, was listed and delisted by Bitgate, the groups behind the Flokey protocol and the Bitgate crypto exchange have been accused of market manipulation. This is according to an October 31 social media post from Floki's team and a blog post from Biget.

Floki's team said Bitget had listed the token before its launch, referring to Bitget's listing as a “fake token”, while Bitget said Floki's team was “suspected of market manipulation by maliciously manipulating initial liquidity”.

Floki's team said it submitted a proposal for Floki's Decentralized Autonomous Organization (DAO) on Oct. 18 to launch a staking program with a reward token “targeting a strong potential trillion-dollar industry.” Meanwhile, the group was in talks with a centralized exchange to list TokenFi. The name of the token was not released in the DAO proposal, and the group did not explain what the purpose of the “reward token” would be. However, they say this information is disclosed to many centralized exchanges.

According to the group, they have told centralized exchanges not to list the token for at least seven days after its launch, as doing so would violate the governance rules established by The DAO. All exchanges have agreed to this rule, Floki's team said in a post. But Bitgate has breached this agreement, they said. Instead of waiting seven days to list a token, they listed it before launch. This means the token was not available for sale at the time it was listed on Bitget, the team said.

On October 26, Floki sent out a warning to investors that any current TOKEN listings on centralized exchanges are unauthorized, although they did not mention Bitget by name.

The TokenFi token was scheduled to launch on October 27 at 3 pm UTC, according to the group's social media post. According to Coincodex data, it was listed at an initial price of $0.00005011 and launched on October 28, although time zone differences may have caused the date to vary. The price immediately rose to $0.005850, a gain of 11,574 percent. At the time of publication, the price was even higher, reaching $0.006053 per coin.

According to Floki's team, Bitgate listed the TOKEN without having anything to sell to its customers. As a result, it is unable to process withdrawals. They claim that Bitget has ended up with a $20 million liability to customers and no TOKEN assets to protect against this liability.

Floki tried to buy Bitgate tokens from TokenFi's treasury at a 90% discount to the current market price, which the group said it refused. Bitgate reportedly issued its “Delisting” statement in response to this refusal.

According to the Bitgate post, the TOKEN will be listed on October 27, 2023. After the listing, the Bitgate team noted that the TOKEN had “significant price fluctuations.” Due to the large volatility, the exchange suspected the development team of “manipulatively manipulating the initial liquidity” of market manipulation. Bitgate claims that only $2,000 of initial liquidity has been added to the token pool. They also claim to have found an “opaque token economy and an opaque vetting program,” making it impossible to continue issuing TOKENs.

Related: FLOKI price up 140% in a week – memecoins finally waking up?

In the statement, Bitget offered to buy back all the TOKEN it sold to its customers. The maximum value of the token will be paid to customers before delisting, which is $0.00605002 per token, or about 121 times the original price. This means that any losses incurred prior to the cancellation will be covered by the exchange. However, investors who buy from Biget will not benefit from any token appreciation after listing.

Floki's team denied Bitgate's claim that Floki only offered $2,000 worth of tokens in its initial liquidity pool. They claimed nearly $2 million in the two TOKEN pools. They posted a screenshot of the charge showing the amount from DEXTswap.

The screenshot shows the current liquidity, not the initial liquidity that Bitgate mentioned. The addresses of the contract are stored in the abbreviation of the image, which makes it difficult to see the pools in the block browser. Cointelegraph was unable to determine the initial liquidity of the TOKEN at the time of publication.

TOKEN is not the only token startup snafu that has cost millions of dollars. BALD token on Base dropped by 85% after the developer withdrew liquid from the pool, although they claim they are not responsible for the price drop. Investors lost more than $2.2 million when he launched Pond0X, which allegedly had a faulty transfer function.