Brokers Tempt Small Blockchain Companies That Are Looking to Be Listed at Large Cryptocurrency Exchanges

Aug 09, 2018

A CEO of a South Korean blockchain company recently gave up being listed at a large Chinese cryptocurrency exchange when a broker requested about $1.79 million (2 billion KRW) to help this company to be listed.
A CEO of another startup company that is preparing to be listed at a cryptocurrency exchange received an absurd proposal that it is possible to be listed at a small and medium exchange in South Korea immediately without having to go through an evaluation process just by paying a small fee. Thinking that it sounded too suspicious and too good to be true, this CEO decided to look for another exchange.
Illegal brokers who are requesting millions of dollars as commission as an excuse to help startup companies to be listed at exchanges are at large. There are even brokers who are requesting up to $4.46 million (5 billion KRW) as commission to help companies to be listed at large Chinese exchanges. Many of these brokers either trick companies by telling them there are fees to pay for helping them to be listed at exchanges or make exaggerated advertisements to companies with low profile by telling them that they can help them to be listed without having to go through separate evaluation process.
According to industries, many illegal brokers are tempting small startup companies by telling them that they can help them to be listed at cryptocurrency exchanges. At the moment, it is not easy for these companies to dismiss such temptations as they can receive significant amount of financing once they are listed at exchanges.
“I received a call from a broker who introduced as an executive from a headquarters of an exchange and told me that my company can be listed quickly at a large exchange if I pay a commission fee.” said a CEO of a blockchain company that recently gave up on being a listed company.
There are even brokers who say that they can manipulate rankings of listed coins. They are saying that by paying commission, they can increase values of coins from companies that have low brand awareness.
It costs about $8.93 million (10 billion KRW) to be listed at the biggest exchange in China. It costs $10.7 million (12 billion KRW) after considering costs for Airdrop marketing.

Brokers Tempt Small Blockchain Companies That Are Looking to Be Listed at Large Cryptocurrency Exchanges

Although there is no commission to be listed at South Korean exchanges, brokers continuously act behind the scenes for foreign exchanges.
Because it is difficult to contract large exchanges and these exchanges have complicated evaluation process, there are many incidences when companies use brokers.
“I heard that I will need at least $4.46 million (5 billion KRW) to be listed at a large exchange, it is actually an amount that is needed for using a broker.” said a CEO of a South Korean blockchain company. “After meeting representatives from a top 3 global exchange, I have found out that commission is actually not required to be listed at an exchange.”
“Although there are incidences when clients with low potential make requests, many of them are filtered out during evaluation process.” said the same CEO of a South Korean blockchain company. “There are many incidences when brokers tempt companies by telling them listing is possible if they pay brokers commission fees.” It is heard that there were incidences recently when brokers received money from companies and went in hiding.
Large exchanges such as Binance, Huobi, HADAX, and OKex cast votes for customers that have accounts with them. After votes are casted, companies that receive votes more than others are listed at these exchanges.
However, there are incidences when some small and medium exchanges request small amount of cryptocurrencies as part of marketing cost. “Small and medium exchanges requested tokens as they needed these tokens for Airdrop events.” said a CEO of a different blockchain company. “It was a huge burden for me as these tokens were worth millions of dollars.”
It is clear why some companies are still trying very hard to be listed despite financial burden as values of these companies go up significantly when they are listed at large exchanges.
Large South Korean and foreign cryptocurrency exchanges announced that commissions are not required to be listed at exchanges when these fraudulent acts have begun to appear by brokers. South Korean exchanges such as Coinone announced that they do not even require marketing cost for initial Airdrop events.
Staff Reporter Ham, Jihyun | goham@etnews.com

Interpretation & Translation_Service Center

Refund Help Center