SETTING THE RECORDS STRAIGHT ABOUT THE UNAUTHORIZED BITGET $TOKEN LISTING On October 18, 2023, we put up a DAO proposal to launch the Floki staking program and a reward token that will target a trillion-dollar industry with strong potential. While we didn’t mention it in the DAO vote at the time, we were referring to the tokenization industry which is projected to be worth $16 trillion by 2030 and the token that would later emerge from the vote would be @TokenFi with the ticker $TOKEN. Before this DAO vote, we had reached out to all our exchange partners and asked them NOT to list TokenFi until after seven days of the token going live since we intend to put forward a DAO vote to allow the listing. We had conversations with several T1s and highly respected exchanges, and, despite strong interest in $TOKEN and a desire to list it earlier from these exchanges, they agreed to our proposed arrangement to wait until after seven days because that is the right thing to do and they are honorable parties. #Bitget, the smallest of all the exchanges we had a conversation with, went behind our backs to announce a listing as soon as we announced the details of the token launch due to the hype they saw around it. In fact, not only did they go against our desire for CEXs NOT to list until after seven days of launch, they listed a fake version of the $TOKEN token 12 minutes before we made it officially tradable on the blockchain. This fact can be easily verifiable by looking at when their token started trading and when we enabled $TOKEN trading on the blockchain. Seeing their desperate action, we released three statements within a 24-hour period clarifying that NO EXCHANGE has been authorized to list $TOKEN. The first of this tweet was four days ago, which was a day before $TOKEN became tradable, and when their initial announcement went live, so they had the opportunity to stop/delay the listing of the asset. Users also had advance notice from us that they would be listing a fake token. Here are links to the announcements: First announcement on October 26, 2023: xitter.cf/RealFlokiInu/sta… Second announcement on October 27, 2023: xitter.cf/RealFlokiInu/sta… Third announcement on October 27, 2023: xitter.cf/RealFlokiInu/sta… Twitter analytics data show that these three warning announcements had almost 300,000 views combined, which means these tweets had enough visibility for people to know the true facts from our end. Despite these repeated warning tweets, since the hype around $TOKEN is very strong, some people did ignore that request and the fake version of the token that Bitget listed went on to get around $50 million dollars in trading volume on their exchange in a 48-hour period. There was a PROBLEM, however: Not only did #Bitget list a fake token, which they claim to be associated with Floki, against our request and before our token officially went live, they also DECEPTIVELY traded tens of millions of dollars in $TOKEN volume without any blockchain evidence of them having a single unit of the actual token in any of their wallets to represent user purchase of these tokens on their exchange. They initially announced that withdrawals would open 24 hours after they started trading, perhaps hoping the price would crash and they could buy the token in the market. Instead, the token was up only, and their bet backfired, resulting in a hole of over $10 MILLION for them. So, they refused to open withdrawals and tried to bid for time. At this point, we began to see dozens of viral tweets and reports all over social media – particularly in China (where TokenFi is very popular!) – highlighting the fact that Bitget is refusing withdrawal requests and banning legitimate users of their platform who complain about their inability to withdraw $TOKEN on their exchange. Here are just a few of the tweets about their solvency issue: 1. xitter.cf/xingzhi888/statu… 2. xitter.cf/0xPlutoo/status/… 3. xitter.cf/gameboss_eth/sta… 4. xitter.cf/0xPlutoo/status/… 5. xitter.cf/gimpxbt/status/1… These tweets were made days ago by crypto experts who saw the trouble they were in due to their attempted manipulation and greed backfiring. It’s easy to verify the numerous user complaints about their refusal to honor user withdrawals and how they responded by banning users that complain instead: you just need to check the comments in response to their tweets and their Telegram community to see the facts. When we saw these user complaints, we reached out to Bitget and asked them to address this issue: The response wasn’t encouraging, and the decision-makers at Bitget would not even join the chat with us. In fact, at a point, we were asked to email their support team to report their liquidity issues with $TOKEN, even though they were the ones who listed the token without authorization! This was over the weekend btw. Eventually, after persistent efforts on our end to reach Bitget, we connected with the Bitget team and asked them for an honest assessment of the number of tokens they would need to make users whole. BITGET ADMITTED TO NEEDING UP TO 1 BILLION TOKENFI TOKENS TO MEET USER WITHDRAWAL REQUIREMENTS AND FILL THEIR HOLE That is 10% of the supply and worth about $20 MILLION when writing this. In other words, Bitget possibly facilitated $TOKEN purchase requests of up to $20 million from their users without having a single token in their reserves to give to these users should they choose to withdraw. No wonder they refused to open withdrawals. This is like opening an eight-figure short position on $TOKEN and expecting it to crash so they can buy lower to cover their hole. Since we made it clear that no exchange listing for $TOKEN was authorized, a lot of people realized that the token they listed was fake, and this made it difficult for their manipulations to continue. Their token was trading at a 75% discount to market prices at a point, showing people’s lack of trust in their solvency as far as $TOKEN is concerned. Even though the $TOKEN liquidity pool was initially seeded with 10% of supply, a fact that was well communicated in advance, the token has had such STRONG demand since launch that people have bought almost all of the supply in the pool, leaving the pool with less than 1% of total supply and significantly more ETH/BNB due to how liquidity pools work. When users buy, they take $TOKEN out of the pool and put ETH/BNB in it. The opposite happens when users sell. Bitget apparently needs up to 10% of the supply to make their users whole; since the majority of TokenFi supply is locked in the Floki staking pool – over 50% is locked in the staking pool for 4 years, 22% is in the treasury, 5% is allocated to user incentives, and 7% is allocated towards $TOKEN staking rewards – there isn’t enough liquidity circulating in the market for Bitget to buy these tokens to make their users whole due to the strong demand the token has had, which was more than they anticipated. Doing so will increase the price significantly, and they wouldn’t even be able to get enough tokens while their purchase will push the price up by more than 5 - 10 times the token’s market value. They essentially traded SIGNIFICANTLY more tokens than was available to trade in the market, suppressing prices artificially, and still managed to get rekt due to their sheer incompetence. To be clear, the tokenomics for the TokenFi token was announced well in advance and was repeatedly communicated on all Floki channels and to key partners. Bitget saw this and chose to ignore it instead. In addition, if they were buying tokens from the liquidity pool with the actual funds users were using to buy these tokens from their CEX, they wouldn’t have any problems as the price of the token would adjust accordingly, ensuring that they do not sell more than what is in the market and that they are solvent enough to fulfil users’ withdrawal requests. After we connected with the Bitget team, they wanted an OTC deal with the TokenFi treasury to mend this hole. To protect our users, as we have many people complaining and asking us to intervene across our channels, we agreed to do an OTC deal with them at a premium that is VERY FAIR compared to what they would have had to pay due to price impact if they were to market buy these tokens. Instead, Bitget offered to buy the tokens they needed to fill their hole from the TokenFi treasury at a 90% DISCOUNT from the market price at the time of our conversation. We found that quite interesting since the problem was caused by their irresponsibility and their collecting funds from users without buying the TokenFi tokens these users were paying for to cover their users’ position. We made it clear to them that they were acting in bad faith and that we have a responsibility to protect our community, and as such, we will be releasing a statement. In an attempt to front-run the release of our statement, instead of looking for ways to make their users whole to avoid liability and regulatory scrutiny, they hastily put out an announcement “delisting” a token we asked them NOT to list in the first place and accused the team of price manipulation with claims that the team “added only $2,000 to the liquidity pool”, a fact that is UNTRUE and can easily be debunked. Anyone can go to the liquidity pools right now and see at least $1.7 MILLION in the liquidity pools. Having seen the series of shady and dangerous practices from Bitget, namely: 1. Listing $TOKEN before initially communicated timelines due to the hype they saw around it. 2. Listing $TOKEN 12 minutes before we officially made the token tradable. 3. Trading around $50 million worth of $TOKEN in 2 days, such that it was the most traded token on their exchange after $BTC and $ETH during this period, without any proof of them buying any $TOKEN to cover the user position. 4. Refusing to take responsibility for their actions and to make their users whole. 5. Refusing to contact us to fix the issue and trying to act in bad faith after we reached out to them. 6. Falsely accusing our team of market manipulation and lying about the state of $TOKEN’s market liquidity to distract people from their shady behavior. Given all the above facts, we decided to put out this statement to set the records straight. In addition, we are genuinely curious about the state of Bitget’s overall solvency: If an exchange of this size could collect possibly over $10 million dollars from users who had an interest in buying a token they listed without buying the actual tokens on-chain to cover even a fraction of user “holdings” on their exchange, it shows amateurish behavior and poor risk management all around. With what we saw with FTX late last year, it is chilling to imagine that there are still exchanges exhibiting behavior like this. We challenge Bitget to publish verifiable links to their wallets so that users can see their $TOKEN holdings and history. We also have strong reason to believe that the behavior Bitget exhibited with $TOKEN isn’t restricted to just that token. We challenge them to publish links to their reserves showing their $FLOKI holdings. Consequently, we want to clarify that any user trading or holding $FLOKI on Bitget is at an extreme risk and on their own. The highly troubling patterns we’ve seen with how Bitget handled the $TOKEN situation put to question their risk management practices and how they run their exchange. We would hate for our users to be impacted when the true state of their solvency becomes clear.