On January 4, 2022, Hotbit spotted some abnormal deposits of POKT token and immediately disabled POKT trading/ deposit& withdrawal (announcement link) before communicating with the POKT team in no time.
Hotbit has conducted a thorough investigation and reviewed the entire process, and present the detailed documentation (link to technical analysis). Brief conclusion is as follows:
- POKT team is responsible for the development and maintenance of the entire wallet technical documentation and block explorer.
- The document was defective when Hotbit integrated the POKT wallet on December 20, 2021, and this defect could not be detected through the block explorer. (After the incident was reported by Hotbit, POKT team fixed the bug on the documentation and explorer)
- This defect led to a small number of users making fake deposits. Due to the defect of the block explorer, Hotbit’s risk control team could not identify the risk correctly, which eventually led to a deficit of 2,461,317 POKT on Hotbit platform. Attached all fake deposits tx (fake tx documentation link)
- POKT team is partially responsible for this accident for providing defective documentation and block explorer.
In order to protect rightful interest of Hotbit users, Hotbit has made great efforts to reach out for making up the 2,461,317 POKT deficit. The information obtained during the whole process is as follows:
- The investors of POKT are in a lock-up period, so they cannot sell tokens to help us.
- POKT team has been selling a large number of unlocked POKT tokens from POKT’s staking reward in the OTC market over the past year. Therefore, POKT team has a large number of POKT tokens in their hands.
Based on the above as well as POKT team’s partial responsibility for the incident, Hotbit proposed to the POKT team that Hotbit could purchase of tokens at the price of private round to compensate users.
Unfortunately, Micheal, the founder of POKT, has been avoided conversations and refused to respond from Jan 6th till 13th this entire time despite the fact that Alex, the technical director of POKT, has admitted that he saw spam deposits on January 6. On January 13, another alleged POKT member, Adam, made a proposition to Hotbit that we could go to POKT DAO and initiate a motion to try treasury compensation.
And here is what we think:
DAO is a great governance tool yet it shouldn’t be a convenient tool to let the wrongful conduct off the hook. POKT team is responsible for the incident because of the wrong document. If we are lucky, the DAO motion gets passed so Hotbit users would recover from the loss; oh wait, but if the DAO motion should get denied, does that mean POKT team would be exempted and call it “the will of the community”?
The answer is obvious. And we believe POKT team should be held responsible for false documentation no matter what the DAO motion votes or what-they-may-call-it” will of the community”. Secondly, none of the investors have issued coins, meanwhile POKT team have been selling a large number of staking rewards of POKTs in the market, indicating that voting control is likely in their hands. POKT team has shown refusal to take responsibility, can we count on them to vote yes even if the DAO motion is initiated?
After Hotbit expressed this to POKT team, Adam actually began to slander Hotbit for selling counterfeit coins, completely ignoring the fact that Alex, a core member of his technical team, admitted many fake deposits tx (fake tx document link)
Based on the above, Hotbit strongly condemns the dereliction of duty of POKT team founder Micheal, and team member Adam’s refusal to cooperate and slander!
Hotbit will make every effort to protect users’ rights. We recommend that you take the following steps:
- Since POKT team “likes” DAO, we use DAO. We strongly recommend that you file a proposal on the POKT DAO (link to the POKT DAO forum). We might not be a giant for them to take seriously, but the voice from united community is what they fear. At the same time, please feel free to express your voice on Twitter, Telegram and other social media. Make yourself heard in the POKT community. (POKT’s twitter, Telegram, Discord links)
- If you want to get out of this incident, you can contact our customer service. And Hotbit will repurchase your POKT at the price you last purchased POKT to ensure that you would not suffer any loss.
- If you plan to file a legal lawsuit against POKT team, Hotbit will help you to provide evidence and assistance free of charge in any part of the world !
Related Links:
- Hotbit stops POKT deposit& withdrawal /transaction announcement link
https://hotbit.zendesk.com/hc/en-us/articles/4417971601815
- Links to Technical Analysis Documentation
https://docs.google.com/document/d/16nM5rbQ46I3M_rjOWg6CUZfdCAthuxQGNg86e14h8o8/edit?usp=sharing
- Fake tx documentation link
https://docs.google.com/spreadsheets/d/11ajaTUicGP7GG47KdW7jfM1SOs9_e1b6P-ICH0Zkr-E/edit?usp=sharing
- POKT DAO Forum link
https://gov.pokt.network/
- POKT Twitter Link
- POKT Discord Link
https://discord.com/invite/uYs6Esum3r
- POKT Tg Link
https://t.me/POKTnetwork
- US SEC reporting link
https://www.sec.gov/
- How to import your order history
https://hotbit.zendesk.com/hc/en-us/articles/360010088313-
I have 10 years of experience in the field of cryptocurrency and have written for many different publications. I am currently the Head of Research at a major cryptocurrency exchange. In my free time, I enjoy writing books on this subject.
