Unregulated, disruptive and promising great potential, the ICO space is the new Wild West of the financial world. And the field’s latest controversy is about a project that offered preferential rates to a small group of investors while the token sale was already in progress.
ICO investors are calling out Cobinhood in community forums and on social media for enabling its partner, cryptocurrency investor Ian Balina, to offer a 150% bonus to his followers. This was while only a 20% bonus was offered to everybody else (it has since already dropped to 10%).
If you are not familiar with the field, it is quite common for projects to offer much better rates for some people (big or famous investors, early adopters, partners…), but this is usually only done during the pre-ICO stage.
This is the Telegram message sent by Ian Balina that got everyone riled up:
“I have invested in Cobinhood and have become a strategic partner. I will be traveling to Taiwan to meet the team and do a live stream AMA with them. They are not paying me, if anything I am paying them by participating in their ICO.
As strategic partner I am entitled to a generous terms for token purchase. These are normally reserved for Patreon members, but since we have room to spare, I am opening this up to my entire ICO Telegram.
I can do this now, because we’ve created a smart contract to automate everything. So we can now scale and have more people involved.
I still believe in helping out the little guys, and I am doing that with this. Below are the terms. Please don’t share outside the group otherwise people who invest outside the group will likely lose their money.”
The backlash forced the CEO to issue an apology on the matter:
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Cobinhood is a zero-fee, high-frequency cryptocurrency trading platform. The Taiwanese company raised the attention of investors by getting some big names to support it.
Musician and movie star Jamie Foxx promoted the ICO on Twitter:
— Jamie Foxx (@iamjamiefoxx) September 18, 2017
Last week Cobinhood announced that former White House CIO Tony Scott had signed on as Chief Strategic Advisor. He served as U.S. Federal Chief Information Officer from 2015 to 2017.
“This is a brave new world. COBINHOOD and I share common goals in advancing the cryptocurrency industry in a way which protect consumers and those who are less informed on the safety and security of investments,” said Scott. “There is a big debate right now about what the international rules should be for new currencies and I don’t think there are good answers yet. I look forward to advising Popo Chen and his team in helping to advance a leading cryptocurrency platform for the blockchain era.”
“We are extremely honored to have Mr. Scott on our advisory board,” said Popo Chen, Cobinhood CEO. “He has been at the head of some of the biggest and most admired companies in the world. Today his vision for the future aligns with ours. We agree that the future of cryptocurrency and blockchain technology is bright, but that regulations and cross border laws are needed to protect investors. This is an exciting time to be in this space and COBINHOOD will benefit greatly from his experience and knowledge.”