Dohrnii Labs Accuses Blynex of Unauthorized Liquidation of Tokens

Highlights:

• Dohrnii Labs claims Blynex liquidated DHN tokens worth $500,000 without consent.
• Blynex argues that the liquidation was necessary due to low token liquidity.
• Dohrnii Labs has filed a police report and threatens legal action if unresolved.

Learn-to-earn platform, Dohrnii Labs has filed serious allegations against Blynex, a cryptocurrency exchange. It alleges that Blynex had unauthorized selling of its tokens and not being able to pay back funds as per a loan deal. The main issue in question involves unauthorized sales of Dohrnii (DHN) tokens and failure to provide a promised loan.

Dohrnii Labs stated that it had deposited a large sum of DHN tokens worth more than $500,000 into Blynex. In particular, Dohrnii Labs deposited 12,649,999 DHN tokens as collateral. On March 23, the company entered into a loan agreement of 8,650 tokens as collateral to receive a loan of 80,000 USDT.

However, according to Dohrnii Labs, Blynex failed to offer the promised loan. The alleged exchange is said to have liquidated the entire 8,650 DHN tokens on Uniswap for 149,151 USDT. This action led to a considerable decline in the price of the token in the market. In addition, the company said it could not withdraw the remaining 4,000 DHN tokens from the platform.

Blynex Responds to Allegations

Co-founder of Blynex Mike Baskes said that the liquidation was done in accordance with the risk management system that the platform possesses. It was due to the increased identified risk. This was especially over the issue of the collateral’s potential decrease in value if not liquidated immediately.

🚨 Transparency Update 🚨

We’ve filed a police report in the UAE against @Blynexex and affiliated individuals.

Nearly 24h ago, our team attempted to withdraw 4,000 DHN — the transaction remains blocked with no response.

We never received a loan, yet @Blynexex liquidated our…

— Dohrnii Labs (@Dohrnii_io) March 24, 2025

Baskes noted that the action aimed to prevent loss-making since the DHN tokens had limited market liquidity. When the liquidation happened, $8,650 worth of DHN tokens sold for $145,000 worth of USDT instead of $149,151 USDT due to the illiquidity constraint of the token. He also elaborated that the decision to liquidate aimed to prevent the platform and its users from being exposed to a volatile market environment.

Legal Action Threatened by Dohrnii Labs

In light of these events, Dohrnii Labs has reported Blynex to the police in the United Arab Emirates for fraudulent liquidation. The company asserted that the liquidation was more than the worth of the loan and threatened to take legal action if the issue was not resolved.

The platform also raised concerns with Blynex’s offer to refund the 8000 USDT and the enabling of the withdrawal of the 4000 remaining DHN tokens. However, the exchange conditioned the offer on Dohrnii Labs leaving the legal claim. Dohrnii Labs declined the offer stating that the withdrawal of 4,000 DHN tokens was something they were entitled to do and should never be a point of negotiation.

Blynex’s Attempt at Resolution

Blynex engaged Dohrnii Labs several times to propose various solutions to the issue. The exchange suggested returning 80,000 USDT and removing the remaining 4,000 DHN tokens to stop all legal actions. However, Dohrnii Labs rejected this offer and decided to take further legal action on the dispute.

We have reviewed the ongoing situation thoroughly and must set the record straight once again regarding the recent allegations made by Dohrnii Labs.

Blynex has not only acted within the bounds of the law but has consistently attempted to resolve this matter fairly and amicably.… pic.twitter.com/DBnZajszCv

— Blynex Platform (@Blynexex) March 24, 2025

The exchange also questioned some of the malicious activities of Dohrnii Labs. They cited the withdrawal of liquidity from decentralized exchanges and manipulation of the price of DHN tokens. Blynex opined that these actions may have put the company in such a state. In addition, they increased the chances of further liquidation.

Dohrnii Labs has made it clear that the company takes Blynex accountable, and it must face justice. The firm is working with the local authorities of the UAE and plans to coordinate with other aggrieved parties to file a lawsuit. Dohrnii Labs also stated that filing the police report is only the initial measure pointing to what it considers to be a huge violation of trust.