Tech

OKX staff issues clarification amid ‘shell token’ purchase inquiries

04/25/2023
Bitcoin Ethereum News

According to a post on April 24, cryptocurrency exchange OKX does not support the buying and selling of “shell tokens” listed on the exchange.

The clarification came after OKX staff member Haiteng shared a series of WeChat conversations where an individual allegedly approached OKX staff to purchase “shell tokens,” or as the individual described:

“[Tokens] Listed on OK, but project can operate no longer. Someone wishes to take over such projects.”

Another message reads: “Find an OKX shell token; budget is $1.5 million, deposit has been collected, DM me the reliable ones.” In response to the inquiries, Haifeng stated:

“OKX does not support the buying of shell tokens. In addition, projects that can sell shell tokens are those that typically cannot operate functionally.”

Haifeng added that OKX regularly monitors tokens listed on the exchange and tokens where developers “maliciously manipulate market, operation, security and other risky behaviors” will be delisted from the exchange. “Don’t even think about earning this kind of money in OKX,” he wrote.

The same day, Mingxing Xu, founder of OKX, also commented on Haifeng’s tweet:

“Don’t be evil. All projects [that] stop develop will be delisted according to OKX listing agreement.”

Like shell companies, shell tokens involve coins with no significant underlying business activities, assets or market value. In the case of a shell token, a project may have gained initial traction to have its token satisfy listing requirements on an exchange, but later, its business activities and operations stall. When a project ceases to operate, its underlying token requires manual removal from the listing. As OKX staff has pointed out, purchasing a shell token can potentially give rise to market manipulation.

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