Seychelles-based crypto exchange OKX will reimburse victims of a GameFi scheme that manipulated the market price of its native CELT token.
The exchange will seize $2M worth of USDT from five accounts on its platform related to the proceeds of the market manipulation of the CELT token used in Celestial, a blockchain game.
OKX Offers CELT Victims $3M in Reimbursements
According to OKX, the Celestial team pumped the CELT price by illegally appending OKX’s name to the game’s marketing strategy.
The exchange clarified that while OKX Ventures had invested $100,000 in the project about two-and-a-half years prior, related tokens from the project would only be unlocked “within a year.”
After picking up on the beneficiaries of the scam, the exchange seized roughly $2 million in USDT from five accounts. It will use these funds, plus an additional $1 million USDT from its own pocket, to reimburse victims.
The exchange said it would announce details of an airdrop to affected victims within 48 hours.
OKX added that preliminary investigations revealed “no evidence of internal staff involvement in the incident.” It added that any offending employees “will be dealt with seriously.”
By contributing its own funds, the exchange is boosting its public image following the recent publication of its proof-of-reserves report that showed it held $7.5 billion in clean assets. That is, the assets do not include OKX’s OKB token. The exchange has pledged to continue publishing the reports.
It also recently made headlines by delisting GUSD, the stablecoin native to the New York-based Gemini exchange. The action caused the asset to fall from its dollar peg.
Big Price Movements Could Come to Bitcoin Later This Year, Warns Analyst
Big price movements could come for the world’s largest crypto this year, says Ivan Kachovski, a strategist at Swiss multinational investment Bank UBS.
He recently told the Block that certain creditors of bankrupt crypto exchange Mt. Gox might cause the price of Bitcoin to tank depending on the reimbursement option they choose to receive. Tokyo-based Bitcoin exchange Mt. Gox filed for bankruptcy in 2014 after losing 650,000 to 850,000 Bitcoin through software anomalies.
Kachovski said that those electing to receive lump sum payments in fiat could cause the price to tank because Mt. Gox would need to sell Bitcoin equivalent to 10% of the last month’s active supply to raise cash when payments are started.
Data from UBS and Glassnode has previously shown that increases in active supply cause Bitcoin’s price to drop.
However, Kachovski noted that two of Mt. Gox’s largest creditors would likely choose crypto reimbursements, resulting in a milder decline.
Last month, Mt. Gox Trustee Nobuaki Kobayashi extended the registration window for creditors opting for lump sum payments to Sep. 30, 2023.
For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.
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Disclaimer
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.
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David Thomas