Bitget, Floki teams accuse each other of manipulation after token listing

AI and Fake Token Detection

The Floki protocol and Bitget crypto exchange have had a spat after the token TokenFi (TOKEN) was listed and delisted by Bitget. This was revealed in an October 31 post from the Floki team and a blog post from Bitget. The Floki team alleged that Bitget listed the token before it was launched, calling it a “fake token”, while Bitget accused the Floki team of “suspected market manipulation by maliciously controlling the initial liquidity.”

The Floki team said they proposed a staking program with a reward token on October 18 to the Floki decentralized autonomous organization (DAO). The token aimed to “target a trillion-dollar industry with strong potential”, and the team was in talks with centralized exchanges to list TokenFi. The name of the token was not disclosed in the DAO proposal, and the team did not state the purpose of the “reward token”. However, they claimed they had revealed this information to multiple centralized exchanges.

The Floki team said they told centralized exchanges not to list the token until at least seven days after it had been launched, as this would violate governance rules established by the DAO. All exchanges agreed to this, according to the Floki team. However, they claimed Bitget violated this agreement by listing the token before it was launched, meaning it was not available for sale at the time it was listed on Bitget.

The issue of fake tokens and market manipulation has become increasingly relevant, leading to the development of AI for fake detection and AI image generators. AI has been used to detect fake tokens and generate fake images to prevent market manipulation.

Fake AI and TokenFi

On October 26, Floki issued a warning to investors that any current TOKEN listings on centralized exchanges were unauthorized, without mentioning Bitget by name.

According to the TokenFi team, the TokenFi token was scheduled to launch at 3 p.m. UTC on October 27. Coincodex data shows that it was listed at an initial price of $0.00005011 and was eventually launched on October 28. The price rose almost immediately to $0.005850, a gain of 11,574%. At the time of writing, its price has gone even higher, to $0.006053 per coin.

Floki accused Bitget of listing TOKEN without having any of it to sell to its customers. This resulted in Bitget having a $20 million liability to customers and no TOKEN assets to hedge this liability.

Floki further stated that Bitget attempted to buy tokens from the TokenFi treasury at a 90% discount to its current market price, but the team refused. Bitget allegedly released its “delisting” statement in response to this refusal.

The use of fake AI and AI-based fake generators has become increasingly popular, with many companies and organizations utilizing AI to detect fake news or images. However, the Floki and TokenFi case shows that fake AI can have serious consequences.

AI and Fake Detection

On October 27, 2023, TOKEN was listed on Bitget and the team noticed “significant price fluctuations”, leading them to suspect “market manipulation by maliciously controlling the initial liquidity”. Bitget stated that only $2,000 worth of initial liquidity was added to the token’s pool, as well as an “opaque token economy and an unclear vesting schedule”. As a result, they decided to buy back all the TOKEN they sold to customers, paying out the peak price before delisting of $0.00605002 per token.

The Floki team, however, denied Bitget’s claim that only $2,000 worth of tokens were provided in the initial liquidity pool, stating that nearly $2 million of liquidity was in each of the two TOKEN pools. They posted a screenshot from DEXTswap showing the amount available, but the contract addresses were abbreviated, making it difficult to verify.

To combat the issue of fake and maliciously controlled tokens, AI-based fake detection and generator systems have been developed. AI can detect fake tokens and images, as well as generate fake tokens and images. This technology can help prevent market manipulation and ensure the integrity of the token economy.

Investors have endured millions of dollars in losses due to token-launch snafus, such as the BALD token on Base dropping 85% after its developer pulled liquidity from the pool, despite their claim of innocence. Another example is Pond0X, which resulted in investors losing over $2.2 million due to a faulty transfer function. Such cases of fake AI, AI fake detection, and AI fake generator have raised questions about using AI to detect fake content.

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