The Learn-to-Earn platform DOHRNII LABS has filed a police report to the United Arab Emirates, accusing the local crypto exchange blynex of liquidating its tokens without permission and failing to deliver a promised loan.
According to a statement shared with Cointelegraph, the DOHRNII LABS deposited 12,649.99 DOHRNII (DHN) token – costs more than $ 500,000 – including Blynex. On March 23, the company said it used 8,650 in those tokens as collateral for a 30-day loan in exchange for 80,000 USDT (USDT).
DOHRNII says the exchange has never delivered USDT. In addition, the team said Blynex liquid was the entire 8,650 position of DHN in Uniswap, receiving 149,151 USDT and caused a collapse in the value of the token market.
Attempts to recover the remaining 4,000 DHN tokens were unsuccessful, the company said.
Source: DOHRNII good
Blynex claims that it is automatically manageable at risk
Blynex co-founder Mike Baskes told cointelegraph that the incident was part of their “automatic risk management system.” The baskes claimed that their system saw a high risk that the collateral would be lowered in the event of extermination.
The Blynex executive said that when the tokens were sold, it only formed 145,000 USDT instead of its original value. He noted that DHN token Liquidity was limited, estimating only $ 315,000 available at the time of the transaction.
The executive claimed Blynex to take action to prevent financial losses:
“Due to this forcing of liquidity, the system identifies a high risk of further loss if the collateral is not liquid right away, as the tokens will be difficult to sell at an interesting price in the current market.”
The DOHRNII LABS challenged that explanation, calling Blynex’s reasoning to be “misleading” and claiming that the exchange exchange costs almost double the loan cost.
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DOHRNII LABS threatens legal action against Blynex
In response, DOHRNII LABS Filed The UAE police report and threatened to take legal action against the crypto exchange.
A DOHRNII LABS representative told Cointelegraph that the police report was a “first step.” The representative said that if Blynex ignored their communications, they would legalize this matter:
“Since the project and the individual responsible are based on the UAE, we also contact local regulators, including vara, ADGM, and other relevant authorities. Moreover, we are in contact with other affected projects and actively explore the possibility of joint legal action.”
The team said they wanted to ensure responsibility through the legal system and regulatory administration.
DOHRNII told Cointelegraph that Blynex had attempted to improve the matter by offering them 80,000 USDT and allowing the removal of 4,000 DHN tokens.
However, the exchange added a condition that the platform would lower all legal actions. “It’s not acceptable,” said DOHRNII Labs.
“The 4,000 DHN tokens in discussion are user deposits -not business -owned businesses. The right to revoke these funds should not be up for discussion,” DOHRNII LABS added.
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