Evidences accusing CoiNeal Exchange of defrauding CYBR Team around $2.3 million during the CYBR Token’s Initial Exchange Offering (IEO) have surfaced.
The CYBR team in a release stated that it dug up clear evidence of “deliberate fraud” by CoiNeal during an IEO it ran on the exchange between June 23 and July 2.
According to the CYBR team, publicizing the fraud will serve as a warning to projects intending to launch its IEO on the platform.
As well, it will keep CoinNeal’s customers abreast of the exchange’s alleged fraudulent behaviours.
On the fraud allegation, CYBR team said it ran an IEO with the aim of raising around $4 million.
Before the end of the IEO, CoiNeal reported to CYBR and to its customers that it sold around $2.3 million USD worth of CYBR.
According to CYBR team, CoinNeal did not send the details of the proceeds until July 4, few days after the IEO was finalised. The exchange only reported proceeds amounting to $3456 USD instead of $2.3 million USD worth of CYBR.
Within 8 hours of the IEO, CoiNeal’s launchpad revealed around 0.02% of the total available tokens (less than $1000 USD) were sold.
When the offering period was extended to July 2 without CoiNeal briefing the CYBR’s team, team contacted the listing manager to express their displeasure.
Less than an hour after the listing manager was contacted, the reported sales jumped to 51% of the hard cap (slightly over $2.1 million USD).
On July 2, the reported sales jumped to 56% of the hard cap (around $2.35 million USD).
At the time CoinNeal declared proceeds of $3456, around $2.3 million inaccurate sales numbers was displayed on the platform.
At this point, a CYBR team member by the name Mr. Key contacted CoiNeal’s listing manager on the inaccuracies. However, the listing manager said it was a result of a technical issue.
The statement resulted in Mr. Key briefing his attorney, however, the site already made some updates to the erroneous sales numbers.
Afterward, CoiNeal announced it won’t be listing CYBR owing “to insufficient preparation” on CYBR’s part and due to “inconsistencies in the cooperation process between CYBR project and Coineal.”
CYBR team said this is not the first time CoiNeal would be releasing inaccurate IEO sales numbers, more importantly now that the platform has started deleting the results of past IEOs on its Launchpad page.
The press release reflects that if CYBR has not raised the concerns to CoiNeal, the exchange would have listed the token and “worked out a deeply discounted deal for the unsold tokens or another way to monetize them down the line.”
CYBR accused the firm of fraudulent behaviours, and stated that some startups have also faced the same issue but are not in the position to speak out.