Cobinhood

About Cobinhood

Cobinhood was a Taiwan-based cryptocurrency service platform founded in 2017 by Popo Chen and Wei-Ning Huang. Popo Chen, a serial entrepreneur and founder of the live-streaming platform 17 Media, served as CEO, while Wei-Ning Huang, a former Google engineer, acted as CTO. Chen, who earned a Master's in Electrical Engineering from National Taiwan University at age 22, aimed to create a financial center for the blockchain era. The company launched its ICO in September 2017, raising over $10 million, and the exchange went live in December 2017.

The firm's core offering was a cryptocurrency exchange that distinguished itself with a zero-fee trading model for both spot and margin trading. This approach was designed to attract a high volume of traders, thereby creating liquidity. Revenue was not generated from trading fees but from ancillary services. A primary revenue stream was its ICO underwriting service, where Cobinhood would vet, manage, and launch ICOs for blockchain projects in exchange for a percentage of the funds raised, typically 5%. This service aimed to solve liquidity issues for new tokens by listing them on the Cobinhood exchange immediately after their ICO. The company also earned income from interest on margin trading loans.

The platform featured its own ERC20 token, COB, which provided holders with benefits such as discounted margin trading interest and lower withdrawal fees. Cobinhood's exchange was engineered to be high-performance, capable of processing over a million orders per second to facilitate real-time trading. It also offered margin trading with up to 10x leverage and supported a variety of cryptocurrencies and some fiat deposits. Security was a stated priority, with the company claiming to store 98% of crypto deposits in an offline multisig vault.

Despite its initial ambitions, Cobinhood's operational history was fraught with controversy. In May 2019, the company faced rumors of an exit scam and bankruptcy following issues with its sister company, DEXON Foundation, which allegedly dumped its tokens after its ICO, causing prices to crash. CEO Popo Chen denied these were exit scams, attributing the turmoil to internal disputes. Internal conflict became public when co-founder Tai-yuan Chen was removed from the company in May 2019 due to what the firm described as emotional instability. In January 2020, Cobinhood announced it was shutting down the exchange for a month-long audit, ceasing deposits and promising users they could retrieve funds afterward. This event intensified exit scam accusations, and the exchange ultimately ceased operations.