Cobinhood has been one of the more controversial crypto exchanges that have graced this green earth with its presence. The exchange has recently announced that the exchange will close its doors after a very short lifespan of a bit more than two years, with rumors having flown left and right about its bankruptcy long before this announcement.
Mirroring Robinhood In All But Success
The exchange, doubtlessly named in honor of the Robinhood exchange that offers commission-free trading on conventional assets, made this announcement via two formats. The first being a post on twitter, with the second being a post on Medium.
COBINHOOD Exchange is shutting down and auditing all accounts' balances from Jan 10 to Feb 9 in 2020. It will be re-opened on Feb 10, 2020. All COBINHOOD users can then retrieve their funds accordingly. Please DO NOT make any deposits; it may result in permanent loss.
— COBINHOOD (@COBINHOOD) January 10, 2020
The Cobinhood exchange went live back in November of 2017, with its goal being to serve as a zero-fee, high capacity crypto exchange. This goal very much mirrors the goals of Robinhood as well. Cobinhood managed to branch off into margin trading and ICO underwriting in the months following its launch, as well. However, since the start of mid-2019, things haven’t been looking good. Rumors started to fly around that bankruptcy wracked the company.
Rumours Of Bankruptcy Seemingly Held Truth
Back in May of 2019, various news sources started to report that both Cobinhood and its sister company DEXON were in the midst of bankruptcy and liquidation. According to the news reports, this information was based on insiders within the companies. Others furthered the accusations, claiming that DEXON had dumped a lot of its crypto token: Unlocking and selling large swathes of tokens after the end of its ICO.
As one would expect, the CEO of Cobinhood, Popo Chen, was quick to deny these rumors. Chen insisted that the only issue was an internal restructuring that’s occurred due to financial misconduct disputes. Even though the exchange wasn’t shut down, it became clear something was happening: Users reported being incapable of withdrawals throughout the summer. The company defended these issues, stating that it was part of technical difficulties.
Possibility Of Being Another Exit Scam
Cobinhood has been accused by many sources to have been nothing more than a particularly complicated exit scam. Whether or not that’s true, can’t be decided until the next month rolls over, when the company plans on starting to give refunds to the public. At the time, it’s equal chances of being a bad business plan or being a complicated exit plan, but without any concrete proof, most are just left to speculate unless they are the heads of this company. With any luck, this was all just a terribly-fated business venture, and investor money will be returned shortly.