ADD.xyz self-delisting notification from Kucoin Exchange— $PLT
TLDR: Notice to All Users to Withdrawal Immediately
We are giving an official notice to the PLT community to withdrawal all of their assets from Kucoin effective immediately. Kucoin has officially sent us notification of delisting as according to them, we have breached their listing rules by rebranding, despite them being informed of this prior, which they dispute.
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Members of our community have asked us to elaborate on the breakdown of our working relationship with the crypto exchange Kucoin.com. We have provided a detailed account of events over the past several months leading up to the delisting of $PLT.
This article throws some light on the standing of centralised exchanges in this new decentralised paradigm. We highlight and explain our own experiences and material impact to ADD.xyz leading up to the hack at Kucoin for $150m. Also, this article makes a strong case for why centralised exchanges are losing credibility and why organic token value movement and the use of AMMs such as Uniswap will be the way forward, at least for the foreseeable future.
Unfortunately, we were informed at around September 26th 3am Local time by Kucoin’s business team that we needed to pause all transfers and blacklist a hackers address. The hacker in question has drained Kucoin’s hot wallet to a value of $150m US Dollars. 17,537,352 PLT tokens were transferred from Kucoin’s Hot Wallet to an attackers address in this incident.
Our philosophy has always been to be part of a truly decentralized network of projects. We do not believe that centralised controls over tokens, such as burn/mint functions, pause and blacklisting, are something that the team will ever implement. Nevertheless, there are some scenarios that these functions would benefit us right now, but in the long-run bring the project into direct conflict with full decentralisation.
The story does not start here, but back a few weeks between ADD.xyz and Kucoin’s team. We believe that Kucoin’s actions towards ADD.xyz (Formerly PlutusDeFi) have been the main reasons why the performance of our token has been significantly limited.
Kucoin Locks Our MM Account
Kucoin used the rebrand and name change as an excuse to lock our Market Makers account on September 17th 2020. The consequences of this are that the spread and smooth liquidity were not provided, allowing an entity with a small amount of tokens to push the price down significantly by placing small, constant sell orders. In fact price manipulation has been evident for some weeks.
Just a week later, while still having MM account limitations imposed by Kucoin, the team received no prior notice that they were marking our project with the “ST” tag, despite Kucoin locking out liquidity account and spreading doubt over our relationship with them.
We aggressively questioned them on such suspicious actions, we were originally told that the issue was because of the rebrand, such an issue did not seem to warrant a severe action and the implementation of such a grave warning which introduced panic to the community and even more selling.
We had informed Qian Gao, head of Kucoin’s Business Management of the name change and rebrand during a call, which she acknowledge. Her failure to report this to Kucoin and follow up with the appropriate procedures as the main reason for the cause of the delisting. After inquiring again, they said it was due to the price performance. Oddly, this was mainly due to Kucoin’s actions (Locking our MM account and adding ST tags), not ours.
Kucoin were notified about our upcoming Uniswap Liquidity Program, as a draft was shared with them. Such actions would have allowed more liquidity into the project’s network naturally, however Kucoin took steps to directly hinder this and as a consequence our Uniswap Staking Liquidity Program was delayed on the day it was supposed to be announced due to the “ST” tag being placed that morning without notice. This single destructive action whereby a major program was hindered, tipped the team’s position to get ourselves de-listed from Kucoin on the 27th September 2020, one day to late for our community.
Kucoin had directly impacted the price by locking our MM account (unable to login for 1 week) and also locking withdrawals, causing the project to feel uncomfortable with the hostile approach being taken by Kucoin. Furthermore Kucoin has dumped their tokens on their exchange within the first 24 hours of the initial listing, selling at prices between $5 USD and $1 USD.
On the same day, at September 27th 14:59 PM Local Time / 10:59 PM China Standard Time, outside of their standard business hours, we received a message regarding when we would market making activities start. We found this incredulous to be asked this just hours before we were facing an unnotified “ST” tag and just several hours before the hack.
Red Flags
This triggered some very startling warnings inside of the team as we had no function to withdraw and essentially could be trapped infinitely and coerced by the Kucoin team as we feel at this present time.
Our commitment to Kucoin has been second-to-none. The exchange was selected amongst the various choices the project had due to the commitment and continued support to help grow the community and provide on-going marketing they promised in lieu of the fees that were paid to get listed. It appears the exchange may have benefited from the unlocked tokens immensely and were demanding the project team to keep adding more MM liquidity to ensure they exit out before they finally use excuses to eventually threaten us with delisting. Our liquidity in PLT has been significantly limited and we can stand by these words. The team has faced the brunt of a severely limited performance in the past few weeks caused by malpractice.
Kucoin has benefited immensely from the listing of PLT in exchange for the listing to be marked with “ST” tags, causing us to have to reveal all confidential plans, work and marketing campaigns to their business teams. We do not feel comfortable with this level of intrusion as a DeFi project trying to achieve transparency in an ecosystem where this is paramount.
There have been several DeFi projects, with no tech and a declining price, with no “ST” tag applied and with no pressure as such in the scale applied to the ADD.xyz team. The only effects of their actions have been to significantly drive our price down, while asking us to expose marketing, tech releases and news before the rest of the community which is a conflict of interest and makes us feel uncomfortable. Unlike other projects, we have not received any serious marketing collaboration with Kucoin as of yet, despite the pressure applied by them.
Luckily, the team did not deploy more funds for liquidity to Kucoin, hours before the hack, but we have not established the status of our locked liquidity inside of Kucoin.
We are now facing potential damages and losses to our project as we will need to renegotiate with exchanges to carry out the maintenance work for a new token address, the costs involved in deploying and auditing a new token smart contract, instruction of specialised legal counsel, all while having our liquidity stolen by a hacker and even our potential listings hanging in the balance.
Prior to this, we were fully occupied as a project dealing with the consequences of the “ST” tag that Kucoin imposed on us without notice, while subsequently explaining to us that it was not a serious matter and could be removed with progress. Such actions are devastating and destroy progress.
Our experiences as a DeFi project in the past week has brought us back to the classic reasons why users are moving away from centralised exchanges and towards DEX’s as coercion, pressure and manipulation are something which can be limited.
Kucoin regains hacked tokens mysteriously — Users withdrawals being blocked.
In December 2020, $PLT tokens were somehow mysteriously regained without any information provided by the exchange. We do know that around 7.5m PLT was sent to a hot wallet owned by Kucoin, which had direct link to withdrawals on their platform. However as the hot wallet has reached almost 0 PLT, there have been a number of Kucoin Exchange Users reporting to us that their withdrawals are now being cancelled automatically.
Kucoin has never provided any information to us regarding how many tokens were regained by the hacker, and why the specific amount of 10m $PLT was sent into a cold storage wallet and the remaining into another wallet. The Add.xyz team has never sent Kucoin any amount near 10,000,000 $PLT.
There is a potential chance that 10,000,000 $PLT tokens are still in the control of the Hacker or that Kucoin may attempt to seize their users PLT assets.
Notice to All Users to Withdrawal Immediately
We are giving an official notice to the PLT community to withdrawal all of their assets from Kucoin effective immediately. Kucoin has officially sent us notification of delisting as according to them, we have breached their listing rules by rebranding, despite them being informed of this prior, which they dispute.
Next Steps
As we look into the next steps, we need to ensure that our project does not incur additional damages. We have initiated legal action against Kucoin and several individual directors of their exchanges in western courts and in their jurisdiction of china.
Having talked to other DeFi projects also facing bullying actions by the exchange. We were pointed to VID which opted to self de-list. VID also noted issues with token price manipulation from the exchange and requested to be delisted. Rather than spend weeks and months appeasing Kucoin and having them informed about all potential catalysts which could increase price, we would be fighting a losing battle through constant selling pressure to their benefit in arbitrage by malicious actors.
Months after the initial hack, Kucoin Exchange is being sued by several projects for damages and they seem intent on not cooperating.
After our experiences, the team reached consensus to DELIST from Kucoin and to move all further initiatives around liquidity to DEX’s like Uniswap. The damaging effects from potential insider trading and manipulation from opaque entities are negating all of the work the project is doing around the clock.
Continuing the Build
Our development team is blazing ahead, with the main-net deployment of our privacy mixer, lending platform and staking, governance and swaps coming before or just after the new year. We are certain that this set back will not stop us and the team is more determined than ever to prove that the value of our creativity and dedication.
