Learn-to-earn platform Dohrnii Labs has filed a police report in the United Arab Emirates, accusing local crypto exchange Blynex of illegally liquidating its tokens and failing to deliver a promised loan. The dispute centers around a significant amount of Dohrnii tokens that were allegedly mishandled by Blynex.
Key Takeaways
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Dohrnii Labs deposited 12,649.99 DHN tokens with Blynex, valued at over $500,000.
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Blynex liquidated 8,650 DHN tokens without authorization, claiming it was part of an automated risk management system.
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Dohrnii Labs has threatened legal action and is seeking accountability through regulatory channels.
Background of the Dispute
On March 23, 2025, Dohrnii Labs reported that it had used 8,650 of its DHN tokens as collateral for a 30-day loan, expecting to receive 80,000 Tether (USDT) in return. However, the company claims that Blynex failed to deliver the promised USDT and instead liquidated the entire collateral on the Uniswap platform, resulting in a significant loss of value for the DHN tokens.
Blynex's Defense
Blynex co-founder Mike Baskes responded to the allegations, stating that the liquidation was a necessary action taken by their automated risk management system. According to Baskes, the system detected a high risk of a significant drop in the value of the collateral, prompting immediate liquidation to prevent further financial losses. He noted that the liquidation generated only 145,000 USDT, which was less than the original loan amount.
Dohrnii Labs' Response
Dohrnii Labs has challenged Blynex's justification, labeling it as misleading. They argue that the liquidation of their collateral was excessive, claiming it was worth nearly double the value of the loan. In light of these events, Dohrnii Labs has escalated the situation by filing a police report and is considering further legal action against Blynex.
Legal and Regulatory Actions
A representative from Dohrnii Labs indicated that the police report is just the first step in their pursuit of justice. They are also reaching out to local regulatory bodies, including the Virtual Assets Regulatory Authority (VARA) and the Abu Dhabi Global Market (ADGM), to ensure that the matter is addressed appropriately. The company is also in discussions with other affected projects to explore the possibility of joint legal action.
Settlement Attempts
In an effort to resolve the situation, Blynex reportedly offered to return 80,000 USDT and allow the withdrawal of 4,000 DHN tokens. However, this offer came with the condition that Dohrnii Labs would drop all legal actions, which the company deemed unacceptable. They emphasized that the 4,000 DHN tokens in question are user deposits and should not be subject to negotiation.
Conclusion
The ongoing dispute between Dohrnii Labs and Blynex highlights the complexities and risks associated with cryptocurrency exchanges and token management. As both parties prepare for potential legal battles, the outcome of this case could have significant implications for the regulatory landscape of cryptocurrency in the UAE and beyond.
Sources
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Dohrnii Labs accuses Blynex of illegally liquidating token assets, StartupNews.fyi.
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Dohrnii Labs accuses Blynex of illegally liquidating token assets, Cointelegraph.
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