Bgogo Crypto Trading Platform to Launch Their “Initial Exchange Offering” as IOU – Without Consent
Bgogo is not a very popular or well-known crypto exchange and falls under CoinMarketCap's top 100 exchange list, which has no fees or that utilize transaction mining. On the regular “reported volume” section, which has some otherwise-no-name exchanges in the upper echelons, Bgogo is #28. However, during the recent price rally in the crypto exchange, the not so popular Bgogo exchange registered $500 million+ trades in the past 24-hours.
How Bgogo Operates
Bgogo is an ICO funded crypto exchange and the ICO event lead to the creation of around 10 billion tokens with a price of around 0.003 USD each. The exchange supports transaction mining operations on its platform and the users get discount from the exchange for the crypto holdings as well as the number of trades done by the users.
Now, the exchange has decided to launch its Apollo project using which the exchange is planning to expand its portfolio to others crypto tokens and various exchange offerings.
The Patterns Of A Scam
Bgogo's decision to expand its exchange offering is fine, but the problems start to originate if we look a little deeper on their offerings. Recently, the platform has promised to conduct an Initial Coin Offering for Algorand on April 12th, and they announced the same with the following message,
“Bgogo Apollo will offer allocations of Algorand token, ALGO, with a limited price to project’s community, later multiple entities from the community will join as initial token traders, including but not limited to project early stage users and private investors, etc.”
Algorand is an upcoming decentralized trading platform and they are yet to announce any token sale. The project is still under the early development phase and has no plans of conducting an Initial Coin Offering as of now. However, Bgogo's announcement claims to conduct an ICO for ALGO tokens and have already set 5 cent price for each token.
Algorand immediately issued a public notice clearing that they do not have any plans of issuing tokens in a public sale,
“To be clear: The Algorand Network has not yet launched and there are no token sales. Any information to the contrary is false. We will be sure to keep our channels updated as soon as there are important announcements.”
If Algorand has not decided or given permission for the token sale, it makes things complicated for Bgogo. It means Bgogo is issuing IOUs for Algorand. This means whoever participate and buy the ALGO tokens won't be able to withdraw it.
Bgogo Beleive Its ALGO Token Offering is not Illegal and Quite Similar to Using Bitcoin Without Satoshi's Permission
Bgogo's approach towards the ICO is quite complicated and they have absurd justifications for the same. The company says that its decision to offer ALGO token through an ICO is no different than people using Bitcoin since none have the permission to use it from the creator Satoshi Nakamoto.
In order to participate in ALGO token Initial Coin Offering, the users must possess the exchange token. All these scenarios combined makes for a very complicated Ponzi scheme and totally against the principles of decentralization.
The Bgogo exchange not only wants you to trust them that Algorand would deliver a token someday but also wants you to believe that the price they have asked for is either the same value of the token whenever it would be launched or more than its current value. These assumptions look like a pure Ponzi scheme to me.
To justify their absurd claims, the Bgogo exchange uses Bitcoin in its defense and the theory is even more absurd. The exchange claims that Bitcoin use all around the globe is being done without the consent of the creator Satoshi Nakamoto.
However, whoever is creating these explanations must be living under a rock, since Bitcoin was created for public use and Satoshi decided to remain anonymous to provide a great virtue to his discovery than patenting it or earn any royalty on it. Bgogo must look for better marketing strategists or business developer. Since Algorand has made it clear that they are not behind the ICO.