News & Updates

Crypto Exchange Bgogo Launchs “IEO” Without Consent

#Bgogo is an exchange which isn’t listed in the top 100 #exchanges by adjusted #volume. They reported an impressive $500+ million in the past 24 hours. Adjusted volume on #CoinMarketCap.com #discounts exchanges with no fees or that utilize #transaction #mining. On the regular “reported volume” #section, which has some otherwise-no-name #exchanges in the upper echelons, #Bgogo is #28.

ICO-BASED #EXCHANGE GOES FULL IEO

Bgogo funded via an ICO, which resulted in the #creation of some 10 billion #tokens currently worth about .003 USD each. The exchange does “#transaction mining” — people get a #rebate based on their token #holdings and the amount of trades conducted on the #platform. Incidentally, this is why they’re not listed on CoinMarketCap’s “adjusted volume” #rankings.

Now Bgogo is using its “#Apollo” project to launch other #tokens and #exchange offerings – whether they like it or not.

#ALGORAND HAS NOT ENDORSED THIS OFFERING

Algorand is a #blockchain platform out of #Boston that has yet to announce a token sale of any #kind. They will be a #decentralized, blockchain-based trading #platform, but they’re still very early in the #development phases. Nevertheless, Bgogo has promised to launch an “initial exchange offering” for #Algorand on April 12th. They write:

Bgogo Apollo will offer #allocations of Algorand token, ALGO, with limited price to project’s #community, later multiple entities from the #community will join as initial token traders, including but not limited to project early stage users and private #investors, etc.

They’re setting the opening price on #ALGO tokens at 5 cents. The problem is that no such #tokens yet exist, and #Algorand has been clear about this;

Algorand@Algorand

To be clear: The @Algorand #Network has not yet launched and there are no token sales. Any #information to the contrary is #false. We will be sure to keep our #channels updated as soon as there are important #announcements.

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This means that #Bgogo is issuing #IOUs for Algo tokens. Anyone who participates in #trading of the token won’t actually be able to #withdraw it. They have a supposed stated value on the #exchange, but there are obvious #problems with this.

HOW IOUS ARE #DIFFERENT THAN TRADING BITCOIN PERMISSIONLESSLY

Bgogo uses some complicated #methods to create the #market. Users must hold exchange-native #tokens to participate in the #trading, but they repeatedly inform the #reader there is no need to “snap up.”

The whole thing seems #counterintuitive to the #ethics of #decentralization and “be your own bank.” Not only must you trust #Bgogo, but you must trust that #Algorand will deliver a token worth whatever you decide to “#invest” in this #IOU trading. Seems bonkers, right?

To justify the #situation, Bgogo says it’s no different than #exchanges trading #Bitcoin without #Satoshi Nakamoto’s permission:

Image captured by former Dior Newsletter writer Larry Cermak and published on Twitter

 

From here, we can state without #exception that listing #Algorand before the token sale has even been announced is nothing like #exchanges trading #Bitcoin without the approval of #Satoshi Nakamoto. The major #difference, of course, is that #exchanges who trade BTC are expected to actually have #possession of the #coins being traded.

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