In a shocking turn of events in the cryptocurrency world, learn-to-earn platform Dohrnii Labs has filed a police report in the United Arab Emirates, accusing local crypto exchange Blynex of illegally liquidating its token assets without authorization. This dispute arises out of a loan agreement that has spiraled into serious allegations about the legitimacy of Blynex’s actions.
Dohrnii Labs alleges that it deposited 12,649.99 Dohrnii (DHN) tokens, worth over $500,000, with Blynex. On March 23, the platform used 8,650 DHN tokens as collateral for a 30-day loan in exchange for 80,000 Tether’s USDt (USDT). However, the company claims that Blynex failed to deliver the promised USDT loan, leading them to accuse the exchange of improper conduct.
In an alarming twist, Dohrnii asserts that Blynex proceeded to liquidate their entire collateral of 8,650 DHN tokens on the Uniswap exchange, garnering approximately 149,151 USDT. This action not only caused a halt in their operations but also resulted in a significant drop in the market value of the DHN token.
Blynex’s co-founder, Mike Baskes, offered a contrasting narrative, suggesting that the liquidation was a necessary measure taken by their automated risk management system. He claimed that the system detected a high risk of substantial losses if liquidation did not occur promptly, arguing that the limited liquidity of DHN tokens at that time necessitated immediate action. However, this explanation has been met with skepticism from Dohrnii Labs, which branded Blynex’s justifications as misleading.
In the aftermath of these events, Dohrnii Labs has threatened to escalate their legal battle against Blynex if the situation is not promptly addressed. Their representative indicated that filing the police report was just the first step. They are exploring further legal actions and are in discussions with local regulators such as VARA and ADGM for accountability and oversight.
Despite Blynex’s attempts to settle the disputes by offering a partial reimbursement and facilitating the withdrawal of 4,000 DHN tokens—which Dohrnii claims are user deposits—the latter has rejected such conditions. They assert that the tokens in question should not be negotiable and must be returned without preconditions.
As the crypto community watches this case unfold, it could set a significant precedent regarding token asset management and the regulatory frameworks surrounding crypto exchanges and their operations. Stakeholders are now eager to see how further developments will impact the involved parties and the broader cryptocurrency landscape.
