TokenBetter suspended, “sheltering” in Hainan is ineffective

In the early morning of November 10, TokenBetter’s official Weibo account updated the news that the person in charge of its exchange “has been cooperating with the relevant Sichuan provincial authorities in the investigation for more than 20 days” and stated that “he has not run away.”

So far, the digital currency exchange has suspended users from withdrawing coins for 24 days. Not only that, the PC and APP versions of the TokenBetter exchange are no longer usable, which makes it difficult for users to believe that it "has not run away."

Fengchao Finance found that TokenBetter, which claims to be headquartered in the United States, has been active in the Chinese market this year and has two affiliated companies in Hainan. One of the companies held by the exchange's founder Xiong Bingbing and group CMO Jia Jihui was deregistered in July this year, while the other affiliated company is still in existence, and the two companies have the same industrial and commercial registration address.

Hainan, once considered by the industry to be open to the blockchain industry, is not a "safe haven" for cryptocurrency companies. Recently, "affected by OKEx" and "being investigated" have become the reasons for many trading platforms to shut down their services. However, in the case of doubts about whether the regulators have intervened, such statements are regarded by cryptocurrency users as an excuse to run away.

Suspend withdrawals for 24 days and shut down both clients

"Why shut down all the servers?" Someone asked this question under the latest news on TokenBetter's official Weibo account. Obviously, the official account's statement that "the person in charge is now cooperating with the relevant Sichuan provincial authorities in the investigation" and "the platform has not run away" failed to convince users.

As of November 10, TokenBetter has been unable to withdraw tokens for 24 days. What is even more worrying for users is that the official website of TokenBetter can no longer be opened, and the APP page is almost blank. The data platform Feixiaohao also notified the outside world that the exchange had "ceased operations" and had removed related trading pairs.

TokenBetter official website can no longer be opened, and trading pairs have been removed from the platform

According to public information, the night of October 16 was the starting point for TokenBetter’s anomalies.

At about 11 pm that night, the exchange announced that withdrawals were suspended due to wallet maintenance and upgrades, but trading was not affected. The upgrade cycle given at the time was 24 hours. But in fact, some users have been unable to withdraw money since that day, and with the closure of the official website and client, trading is also no longer possible.

"My funds worth hundreds of thousands of dollars have been shut down." Someone reported on Weibo that he started investing in digital currency mining on TokenBetter in August this year, but has not reopened the website since it was shut down.

The exchange’s official Weibo account also stopped updating on October 16. Three days later, someone saw a message in the official group signed by Token Better Global saying that “the relevant person in charge of our company is under investigation by the public security authorities”, which made it impossible to authorize the wallet private key. This statement is consistent with the statement given by the official Weibo account on November 10.

News of the exchange's absconding continued to simmer, and a rights protection group was formed. What was the origin of this exchange that trapped user assets?

TokenBetter claims to have been founded in December 2018, but judging from the opening time of its official social channels, it has only become active this year. In April, the exchange disclosed its financing information - it received a total of US$50 million in strategic investment from several institutions. Most of the investors are cryptocurrency investment institutions, including Imagination Fund, Shuimu Financial Technology Fund, Ke Yin Capital, etc., as well as exchange investors such as Biker Capital.

The first message on the official WeChat account of the exchange was published in June, and Twitter was published even earlier, starting at the end of March. The two major social channels, one reaching domestic users and the other for overseas players, but judging from the activity, there are not many fans leaving comments or forwarding messages.

TokenBetter's publicly disclosed businesses include currency-to-currency trading, OTC fiat currency trading and self-developed public chain. It has also issued the platform currency TB, configured staking mining, and opened a fiat currency buying and selling channel for it.

In the following months, the exchange held offline activities in Beijing, Shanghai, Shenzhen and other places, and even held a live broadcast online in September.

The high-profile online and offline appearances may have been intended to win the trust of users. Now that the platform has shut down, its credibility has been destroyed. However, those public activities also left clues to the background of the TokenBetter team.

The company held by the executives was deregistered 4 months ago

TokenBetter has always claimed that it is "headquartered in the United States, with operation centers in Singapore, Taiwan, China, and Hong Kong, China." The personnel of this "overseas" exchange are now being "investigated by relevant Sichuan authorities."

After the service was shut down, everyone was speculating which person in charge was being investigated by the public security authorities. Soon, a netizen broke the news on Weibo, "Xiong Bingbing takes thousands of steps every day."

Since some exchange personnel in the industry were investigated, some users who have a WeChat friend relationship with them have tried to infer whether the other party is in a state of restricted personal freedom by the number of steps on WeChat Sports. Xiong Bingbing, who was concerned about the "number of steps", is the founder of TokenBetter Exchange.

On September 12, Xiong Bingbing conducted a 74-minute live broadcast on Yizhibo, and the video is still available for playback. Earlier on July 24, the TokenBetter official account also broadcast once, and the promotional poster revealed the information of the exchange's CMO Sun Wei and TokenBetter Group CMO Jia Jihui.

TokenBetter members held shares in Hainan Bineng, which has been deregistered

Xiong Bingbing and Jia Jihui are also shareholders of Hainan Bineng Technology Co., Ltd. (hereinafter referred to as "Haineng Bineng"). According to Qichacha, the two hold 9% and 10% of Hainan Bineng's shares respectively. The legal representative of the company is Liu Jia, and the major shareholder and actual controller is Yuan Tao.

It is worth noting that Hainan Bineng was established on February 19 this year, and less than half a year later on June 16 this year, it applied for simple cancellation.

Another company associated with TokenBetter is still in existence. Hainan Liantong Technology Co., Ltd. (hereinafter referred to as "Hainan Liantong") applied for the TokenBetter trademark in June this year. Last September, the company changed its business scope to include blockchain technology development and blockchain business training.

Hainan Liantong, which aims to "become a leading enterprise in the field of blockchain incubators", held a blockchain-themed summit in September this year to celebrate its entry into the Hainan Ecological Software Park. Xiong Bingbing appeared in external publicity as a representative of the Hainan Liantong board of directors.

In other words, Xiong Bingbing holds multiple positions. He is the founder of the exchange TokenBetter, a former shareholder of Hainan Bineng, and a representative of the board of directors of Hainan Liantong.

In addition, the corporate addresses of Hainan Bineng and Hainan Liantong are both located in the Ecological Software Park in Chengmai County, Hainan, and the buildings and floors are the same. During the days when TokenBetter stopped updating its official Weibo, Hainan Liantong also did not post on Weibo for half a month. At the beginning of autumn in August, the latter liked the former's Weibo.

In a topic on Weibo discussing TokenBetter’s movements, someone lamented, “It’s hard to imagine that Xiong Bingbing, chairman of Liantong Technology, who held the Blockchain Industry Aggregation Development Summit and the 2020 Liantong Global Tour Launch Ceremony at Hainan Ecological Software Park last month, ran away with the money a month later.”

Although TokenBetter’s official account emphasized that it “did not run away”, it is difficult for users whose funds are stuck in the statement to believe it when withdrawals are suspended and the client is shut down.

Many platforms were accused of "soft running away" by taking advantage of the OK incident

Judging from the operation mode of TokenBetter, its team founded a technology company in Hainan that is friendly to blockchain enterprises, and at the same time operated a digital currency exchange that is banned in China with an overseas entity. The "two-legged" approach seems to be safe, but it was eventually investigated by the "public security authorities." Of course, whether it is investigated or not needs more information to prove it.

Such exchanges, which claim to have overseas offices but are actually targeting domestic users, have become the norm in the cryptocurrency world. However, during this turbulent period when managers of large exchanges have been cooperating with public security investigations, small and medium-sized exchanges such as TokenBetter, which are "exporting to domestic sales", were the first to experience operational abnormalities. "Affected by OK" and "being investigated" became their reasons for suspending withdrawals or shutting down services.

On October 20, DragonEx, an exchange that had been in operation for nearly three years, announced that it would suspend deposits and withdrawals of all currencies and that it would seek restructuring. The reason was that "after the sudden outbreak of the OKEX incident, a large number of users had a crisis of confidence in centralized exchanges, which led to a run on the platform and rapidly deteriorated the platform's reserve level." In addition, since the platform was hacked in March last year, there has been a funding gap of millions of USDT for more than a year.

As soon as this news came out, DragonEx was directly accused by users of taking the opportunity to "soft run away".

On November 8, DragonEx’s temporary restart plan was to allow users to obtain withdrawal quotas through platform transactions, mortgage loans, and top-ups. This practice made users feel ridiculous, “I still need to top up after withdrawing my own funds.”

If DragonEx can still be regarded as an exchange that is still solving its problems, then some other platforms have started to take advantage of the situation by "running away", and have plausibly put the blame on the "OK incident" and "being investigated".

On October 17, an exchange called RomanEX showed that it could not log in. An investor reported on Weibo that the community group owner said that they were cooperating with the public security authorities in a three-month investigation "to avoid risks" due to the OK incident. There were more than 150 comments replying to the blog post saying that they were also victims. One of them said that RomanEX itself was a pyramid scheme, "Those who entered early have made money, I have only been in it for a month, and I have lost 17,000 yuan."

According to a RomanEX announcement circulated online, the reasons for the platform's suspension of services include "international environment, impact of the epidemic", "international conflicts, Sino-US relations" and local government regulations in Asia, Europe, Africa and America. The reason for "running away" is ridiculous.

The turbulent exchange industry has sounded the alarm for cryptocurrency holders. A cryptocurrency industry insider predicted that as the year draws to a close, the exchange industry will see another wave of runaways. “Withdrawing your coins to your own wallet is the best way to keep your assets safe.”