Cosmochain tried to add 400 million extra coins into circulation
Today Upbit revealed that Cosmochain attempted to secretly add 400 million New Cosmochain coins (New COSM) into circulation. As a result, Upbit announced that they would delist COSM. Cosmochain did not notify Upbit of the discrepancy.
Today Upbit, one of South Korea’s largest crypto exchanges, announced that they will delist the COSM/BTC trading pair from their books on the 10th of this month. The announcement came just over a week after Upbit placed a warning on COSM for traders to beware of its wild price action.
Problems with COSM seem to have started last month when Cosmochain announced that it was acquiring the Spin Protocol (SPIN) and that they would issue New COSM to COSM holders. New COSM will integrate both COSM and SPIN.
New COSM will be issued to COSM holders at a 1:1 ratio whereas existing Spin holders will receive New COSM at a rate of 1:0.122704918 which takes into account average market price. The announcement also stated that the circulating supply of New COSM will be 1,688,991,259 which is about 400 million coins over the expected 1.23 billion.
Investors tracked and confirmed the discrepancy on Klaytn Scope, a service that allows users to check the health of Klaytn-based networks and their transaction history. It’s basically a block explorer for projects on the Klaytn platform. Ultimately, Upbit and other independent investors agree that additional coins were issued without explicit prior notice to the public nor to investors.
Howon Song of Cosmochain acknowledged that the company minted and planned on sharing additional coins. He explained that the additional coins were meant to expand the reach and use of the coin through business development, marketing, and partnerships.
In light of the potential investor outrage, Cosmochain agreed that they will burn the additional coins by September 10th of this year.
Upbit balked at the notion that Cosmochain would try to slip unexpected newly minted coins onto the market. They acknowledged that the random issuance would certainly cause fluctuations in the value of COSM and New COSM. A representative noted that the minting event was the decisive factor leading them to delist COSM on the basis of failing to disclose pertinent information.
COSM trading will end on the 10th of this month. COSM price is down sharply today (-29%) on the news of the delisting and the troubling circumstances leading to the delisting.
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