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Crypto Exchange Delists Its High Volume Tokens in Impending Exit Scam

A crypto exchange, Liqui.io, has delisted 25 token pairs in the space of just two months. In this light, a Reddit user noticing the trend has brought the public’s notice to this fact and has given his comments on the matter. The user believes that the actions following the mass delisting are fraudulent and will lead to an eventual exit scam. The post by the Reddit user reads;

“Liqui.io has been delisting a lot of their coins lately. Including some of their top 10 volume coins like BAT. Meanwhile they give customers just 15 days to withdraw after delisting (approx a month after announcement) to withdraw the coins. People that are on vacation / hodling / sick are likely to miss their announcements. It seems like this short announcement time has a reason: Liqui already started to liquidate 300k USD++ assets!

One of the first tokens delisted was the BAT token. The post gives an address of 0xcc5570e7d39BA1738333782Fb0C5623fb6a6b1f2 and Liqui has been accused of being behind the address and seeming embezzlement of tokens from clients who couldn’t in one way or the other, withdraw or liquidate their crypto assets from the exchange.
Liqui delists tokens

Possible Reasons for the Seeming Liquidation

In the event that Liqui is behind the address, the allegations leveled against them that they are liquidating tokens would be precise. Removing the Basic Attention Token (BAT) from Liqui was weeks earlier before Coinbase listed the token on their exchange and the volume of trading of the token increased, thereby increasing its price. Before the news of the listing, the price of a single BAT token was hovering around $0.16. After the listing, the price had kicked up to $0.24.
The Reddit user pointed out that the numerous users on Liqui.io were given a mere 29 days to withdraw their assets housed in the exchange. It would have been sensible for Liqui to increase the time before tokens were liquidated if a massive 1.4 million tokens remained on the exchange. The mass transfer might, however, not mean liquidation of users BAT tokens. The exchange could have traded BAT personally, and their balance sent to their personal wallet.
On their website, Liqui never stated to trade against its clients on any token pair and if the amount of BAT transferred to the wallet is indeed theirs, it would be considered amoral. On one hand, their action is illegal. On the other, it is not moral. There is also the possibility that the amount of BAT transferred is actually a result of the fees charged to users in the trading of the BAT tokens.
Liqui’s official blog states that user will be unable to withdraw their BAT tokens following the BAT delisting. It is, however, evident that they had several tens of thousands on BAT tokens still on the blockchain.

Delisting of Other Tokens

Liqui also stated on 20th October that the SONM token would likewise be delisted and the delisting would be final on the 11th of November. It is observed that after the delisting, the SONM tokens rose in price indicating that Liqui sold the tokens for more than their worth as at the time of the delisting.
Liqui SONM charts
In SONM’s case, Binance received over 2.3 million tokens.  The Ethereum blockchain notes that as a result of these numerous deposits, Liqui successively brought back an entire 34,000 Bancor Network Tokens, worth over $1 each. Delisted tokens were also treated like the above two, bringing the Reddit user’s total sum of $300,000 liquidated assets.

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