[Parker] Can the Cosmo crisis trigger a Korea crypto market change?
[Parker’s Cryoto Story] While most blockchain projects are still in the early stage, there is one that claims to have increased its operating profit by 600 million won. That is Cosmo, one of the BApps run by Klaytn. Cosmo gained a great deal of attention as it was introduced as the first company to receive investment from Kakao Investment, a fully-owned subsidiary of Kakao. But the project is ensnared with a series of disputes from its dubious debut to profitability. The developments show a different pattern from the previous cases involving questionable digital coins. A day before the controversy erupted, Klaytn released a series of major announcements including the acquisition of Spin Protocol and the issuing of new token (NEW) COSM. They were seen as an optimistic sign after it started making a profit in the first quarter this year. It is also notable that the company made attempts to be covered by multiple newspapers. The biggest difference in the crypto community, however, is that a growing number of novice investors have become more cautious. As soon as the news of fresh tokens came in, investors got down to business to sort through the records. As a result, the additional amount that Cosmo could issue can be around 110 million at maximum, but even when the amount was added up, the total issued far exceeds investors’ estimate. To be fair, Cosmo has something to say. It admitted that it issued some tokens without any notice. The extra coins, however, were sent to a corporate bank account held by Cosmo, not one owned by an individual, according to the unit. It said that “the remaining tokens will be unloaded until September.” In an announcement on Telegram, it said that the 349 million coins that created the discrepancy with the investors’ estimates have been removed. But the announcement was not enough to quell controversy. Entering July, the introduction section for its employees was deleted. One investor said the move is intended to protect employees, but research on LinkedIn revealed that most of the workers either quit or moved to another company between the end of 2019 and early 2020. Attention now goes to cryptocurrency exchanges that support the coin. Upbit announced a termination of trading for COSM on July 7. The reasons cited by Upbit were 1) Technical changes resulting from the merger of other digital assets were not consulted, 2) Arbitrary issuance of COSM, whose source and use are unclear. This shows that the doubts over a new round of issuing (NEW)COSM was a main concern. After the announcement, the prices of COSM plunged by 35 percent. Bithumb has put COSM on a watch list and will determine whether it will keep on handling the coin on July 30. Another exchange called Gdac hasn’t announced its stance on the Cosmo coin.