Cobinhood founder and CEO Popo Chen recorded a video statement apologizing for controversial practices undertaken by the Cobinhood ICO.
Cobinhood is best known as the ICO pumped by Oscar winning-actor and recording artist Jamie Fox, who tweeted an endorsement for the startup last month ahead of its October launch:
The initial coin offering (ICO) for the Taiwanese startup’s decentralized, zero-fee cryptocurrency exchange has already raised more than $10 million in ether (based on current exchange rates) from more than 7,500 contributors and will continue for another two weeks.
Lately, however, Cobinhood has found itself embroiled in a controversy regarding some of its ICO practices. Specifically, the startup has been criticized for offering token bonuses of 100% or more to private presale participants. It is not unusual for startups to give preferential rates to advisors and high-volume institutional buyers, but most companies provide more transparency regarding their presale terms.
Cobinhood, though, appears to have kept a tight lip on its presale terms. The whitepaper makes no mention of the presale, although it does allocate 10% of the platform’s tokens to “private placement.” Cobinhood did not immediately respond to a request inquiring whether the details of the presale had been outlined elsewhere.
Nevertheless, the details of one of these sweetheart deals leaked. Apparently, the company had offered cryptocurrency investor and entrepreneur Ian Balina a 150% bonus, which he intended to pass along to his Patreon subscribers and Telegram followers.
Following a community outcry, Cobinhood CEO Popo Chen posted a four-minute statement on YouTube in which he apologized for the arrangement with Balina, which he said was “unfair for participants who joined [the] ICO through the official channel.” He explained that Balina’s decision to pass the bonus along to non-accredited investors “totally violated the agreement”, so Cobinhood had terminated the arrangement and returned his investment.
“If you recognize Cobinhood’s vision in the cryptocurrency industry and the future economy, please join our ICO and support us,” he added.
Featured image from Shutterstock.
Last modified: May 21, 2020 9:12 AM