Shopin Announces “One-For-One” Token Swap: An AMA With CMO Doron Wesly
(Updated by Eran Eyal, CEO on July 3 17:54 EDT)
After concluding a Token Generation Event that placed Shopin among the most successful TGEs in cryptocurrency history, the company is proud to announce the launch of a Token Swap that aims to protect participants, combat and thwart bad actors involved in a syndicate wallet hack earlier this month, and set a tone to restore security and transparency in the industry-wide TGE process.
To honor and support Shopin TGE participants who were affected by the negligent storage of tokens in a hot wallet and underscore Shopin’s commitment to its loyal community, the Token Swap will officially kick off on July 15.
Please visit our website for specific instructions on how to get involved.
Shopin’s CMO, Doron Wesly, took a moment from the company’s Brooklyn, NY offices to share the news and explain the process behind the Token Swap, how it will work for all participants, and why Shopin feels this solution will set a new standard for how security and privacy is handled by today’s leading crypto companies.
Why is this Token Swap important for the cryptocurrency community?
DW: We are approaching this challenge from a place of deep commitment to our community. This is our proposed solution to an extremely difficult and troubling event that took place on June 1 when one of our Japanese syndicate leads had their wallet hacked, resulting in a loss of about $10 million in tokens that included Shopin, Ethereum, Orbs, and Level Up. We believe that the best approach to making this situation whole again and ensuring that our community continues to thrive in a secure way is to create a one-for-one Swap for anyone who holds original “SHOP” Tokens from our TGE that concluded on May 30.
How will the Token Swap work?
DW: We are essentially recalling the SHOP Token and introducing the new SHOPIN Token. We are creating a new contract with the new token, and instead of sending it out to everyone through an automated distribution system like we did before, we will be much more tempered in how we distribute tokens for the Token Swap to avoid any risk of a security breach.
Is this similar to an airdrop?
DW: Absolutely not. The Shopin Token Swap is not an airdrop, which is a potential securities violation, according to the SEC. It is a process that incorporates elements of due diligence such as KYC-AML verification that is absolutely necessary for the responsible and compliant distribution of tokens.
How did the hack happen?
DW: Shortly after successfully receiving an allotment of 80 million Shopin participant tokens belonging to Japanese syndicate members, 61 million of those tokens were stolen from the syndicate lead’s wallet by what authorities believe was someone with credentialed access.
Shopin was informed of the alleged theft and immediately guided the syndicate lead to file a police report in Japan, a notarized affidavit detailing the events, and the company enlisted one of the world’s top cryptocurrency forensic experts to help further investigate. The syndicate lead also followed our guidance and informed their members of the alleged theft, which included more than 3,000 people who lost their money and were disenfranchised from what had otherwise been an airtight and successful TGE.
Shopin issued an official statement asking all affected participants and the Shopin crypto community to remain patient as the investigation on both continents continues. Additionally, comments have been added in the wallet with stolen Shopin Tokens notifying the public and the wallet owner that the Shopin Tokens were stolen.
From a legal and common-sense standpoint, Shopin’s responsibility ended when the tokens were delivered to the syndicate and they acknowledged the successful receipt of tokens. However, the moral and ethical ramifications are the issue as well as the consideration of 61 million tokens floating around that could be dumped into the ecosystem that Shopin is creating. Shopin takes a very thoughtful and balanced approach to decisions we make as a company and regardless of the fact that this was in no way our fault, we are still intent on providing a solution. You can read more about the hack in Bitcoin Magazine.
How is Shopin setting a precedent for future hack prevention?
DW: We are a company and a team that cares deeply for all of our supporters and participants and this is our way of fixing a terrible situation that never should have happened.
It is absolutely necessary at this time — and at the advice of our legal advisors and community feedback — to retire all original Shopin Tokens in order to disempower the hacker of the Japanese syndicate from profiting from their illegal activities or causing further harm. Period. As a fast-growing industry that is intent on changing the financial and business worlds for the better, we need to find ways to ensure that important events like TGEs are not susceptible to fraud or hacking. This is critical to the future of a decentralized, blockchain-driven future, and we must prevent this from ever happening again.
At the core of this Swap is that Shopin wants to be part of the solution. We want to show the world that regardless of some of the bad press and spotty reputations of some of the companies in the crypto world, we are dedicated to transparency, security, open communication, and a rock-solid business ethic. We want to be part of the new web, not the dark web.
How many tokens will be part of the Token Swap?
DW: 1.5 billion SHOPIN Tokens will be sent to three different wallet addresses — one that is used for Shopin employees, one that holds company tokens, and one specifically for holders of existing Shopin Tokens acquired during the TGE.
What is the value of Shopin Tokens?
DW: The par value of our tokens during the TGE was .10 cents.
Who is the Token Swap process for:
Participants of the Token Generation Event
- Participants who purchased tokens directly
- Syndicate Members
Participants Post-Token Generation Event
- Who obtained SHOP tokens from secondary markets
Japanese Syndicate Members Affected by Hack
Participants of the Token Generation Event:
If Shopin distributed original SHOP Tokens to you, there is already confirmation that you have passed our KYC-AML process and can continue with the Swap.
Please follow these steps:
- Send your SHOP Tokens from the address you first received them to the original SHOP Token contract owner’s address: 0xD8bA97571d9A78184bBB599Bc41Bc10a99FFd72F.
- Please allow up to 48 hours for the Shopin Team to verify receipt of your SHOP Tokens and validate their authenticity and source.
- Once receipt of SHOP tokens is verified, you will receive new SHOPIN Tokens to the same wallet address you sent SHOP Tokens from.
- You will receive a final email confirming the completion of the Token Swap.
Participants of Syndicates:
If you were part of a syndicate or pool, please follow these steps:
- Your syndicate lead will contact you with a contract address unique to your syndicate. No KYC-AML is required. If you purchased any extra tokens from secondary sources such as IDEX or a friend, the process is the same as below.
- Send your SHOP tokens to the contract
- Please allow approximately up to 72 hours for Shopin’s team to audit your transfer (this helps to ensure no stolen tokens enter our new ecosystem)
- Every day, Shopin will release SHOPIN tokens back to your address that you sent your SHOP tokens from.
Participants Post-Token Generation Event:
For those who did not acquire or receive original SHOP Tokens directly from Shopin but instead got them from secondary market sources, such as a decentralized exchange, or a friend, it is absolutely necessary for you to go through Shopin’s KYC-AML process before you’re able to participate in the Token Swap and receive new SHOPIN Tokens.
Please follow these steps:
- Click this link to fill out and submit Shopin’s KYC-AML form.
- Please allow approximately up to 72 hours for the completion of KYC-AML review.
- Shopin will provide instructions post-KYC approval regarding next steps.
- If your KYC-AML submission is not approved, you will be prompted to re-submit your information and documents to conform to Shopin’s requirements.
- If your KYC-AML submission is approved by the Shopin Team, you will receive a confirmation email asking you to send your SHOP Tokens to this designated Ethereum address: 0xD8bA97571d9A78184bBB599Bc41Bc10a99FFd72F.
- Please allow up to 72 hours for the Shopin Team to verify receipt of your SHOP Tokens and validate their authenticity and source.
- Once receipt of SHOP Tokens is verified by our team, we will send you the new SHOPIN Tokens on a one-for-one basis to the same Ethereum address.
- You will receive a final email confirming the completion of the Token Swap.
Why is there an initial lock on trading?
DW: New SHOPIN Tokens will be locked from the beginning of the Token Swap until August 29 to make sure that the original Shopin Tokens are officially retired and there are no errant tokens floating around our crypto universe that are not officially endorsed by Shopin and could possibly be under the nefarious control of a hacker. None of us want this. It discredits our community, the loyalty of our participants, and the integrity of Shopin.
Any final words?
DW: We pride ourselves on helping to instill a more positive and transparent image of the cryptocurrency industry to the outside world by making our company practices and business conduct as traditional and ethical as possible. It is the Shopin credo to be as open and communicative as possible with our industry. We are part of a new generation of crypto and blockchain companies representing a more evolved era of business, and we are making every effort to learn from unfortunate events and lay the foundation for a more productive and honest way forward.
According to our CEO and Founder, Eran Eyal, it is always easier to take a maximalist approach and walk away from a difficult situation. But at Shopin, we are committed to doing what each and every one of us knows in our hearts is the civically upstanding thing to do, especially when it’s the tougher path. Our company was built on these qualities and remains true to its roots.
Never hesitate to reach out to us directly at firstname.lastname@example.org if you have questions or concerns. Thank you for being a part of Shopin!
NOTE: MyEtherWallet message verification
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"msg": "Dear Shopin Token Holder, Because you are in possession of Shopin Tokens, we urge you to read the following - https://medium.com/@ShopinApp/shopin-announces-one-for-one-token-swap-an-ama-with-cmo-doron-wesly-ce22e8c495f5 - regarding the Token Swap that is currently underway. The Shopin Founders - Eran, Jeremy, and Divakar.",