CobinHood, the niche cryptocurrency exchange that promised low transaction fees and convenient desktop and mobile trading, is unexpectedly shutdown. The exchange was registered in the Cayman Islands but based in Taiwan.
In a notice to users, the exchange said it is auditing all account balances and migrating data. It will be re-opened on Feb 10, 2020. Then, the exchange will send an email regarding the withdrawal process to all users and thereafter permit users to retrieve their balances. In the meantime, users are urged against depositing funds.
However, the writing was on the wall. Early last year, the exchange sold its parent organization–Dexon Foundation, DEXON tokens, raising $3.5 million in under a month. Later, it shockingly filed for bankruptcy in May 2019.
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
The crypto community was awash with claims that the exchange was attempting to pulling a classic exit scam. In the aftermath of this announcement, DEXON and COB—the native tokens of CobinHood crashed by 95% and 50%, respectively. They also appointed a liquidator tasked with laying off staff—emphasis the need of “efficiency” and restructuring.