FINXFLO moves on from BitMart.

The Backstory:

BitMart was hacked on an early Sunday morning in December last year.

More than a million FXF tokens were stolen on Dec 5th, 2021, shortly after 6am, and subsequently sold 2.5 hours later on Uniswap for 38.7 ETH.

We had no choice but to suspend trading of the FXF token on our platform until we fully understood the situation and came to a resolution with BitMart.

The Aftermath:

We reached out in good faith to BitMart to agree on a schedule to replace the stolen tokens, which would allow the community to resume trading of FXF.

Unfortunately, we were unable to come to a satisfactory resolution.

We subsequently took the view that BitMart was no longer an appropriate exchange partner and we took steps to terminate our relationship with them.

What Happened Next:

Our compliance team were in constant communication with BitMart to return our tokens, and they were fully returned as of Jan 31, 2022. These tokens were bought back from the open market.

We are continuing to communicate with BitMart to remove our token from their platform and fully terminate the relationship.

What we learnt:

Trust with our crypto community is non-negotiable.

This incident has reinforced the need to waterproof our due diligence on our exchange partners, especially with activities around the FXF token. We are also enhancing our counterparty risk monitoring.

Ramping Up Due Diligence Controls:

We are implementing a robust venue selection process benchmarked against the Best Execution requirements outlined in the EU’s Markets in Financial Instruments Directive (MiFID II).

This process is designed to assess exchanges, other venues, and liquidity providers based on fundamentals such as pricing, available liquidity, as well as speed and likelihood of execution.

In addition, we will be monitoring the reputational risk surrounding venues more closely and will be actively monitoring social channels to detect potential negative narratives surrounding venues, before engaging with them further.