On Dec. xv, news bankrupt that cryptocurrency payments firm and wallet provider FoPay had acquired Republic of estonia-based digital currency trading platform AliExchange for one million of its native Foin (FOIN) tokens. If one were to go by Foin's apparent value at the time, that would make the deal worth roughly $2.1 billion. Indeed, FoPay claimed equally much in the press release that it issued. But Cointelegraph has found a trail of suspicious movements in Foin'southward cost history, likewise equally a web of doubtable business relationships associated with the money's development.

Several crypto news sites covered the claim of a $2.1 billion acquisition uncritically. (Cointelegraph did too, though we removed our article within 15 minutes, as shortly every bit we saw that the article had not gone through our normal fact-checking process.)

The payment was ostensibly made by the Swiss-based Foin Foundation — the coin's development entity — which has 20 1000000 FOIN in its capital reserve, or over 20% of the coin's total supply. According to the press release, the company is planning to pay a small corporeality of Foin tokens to recoup existing AliExchange shareowners following the buyout settlement, while the bulk rest will be kept in AliExchange as liquidity and capital expenditure.

Foin price spikes leading up to and post-obit acquisition

Looking deeper into Foin'due south price movements and the companies' operations, Cointelegraph discovered a number of carmine flags. The token came into existence in late July 2022, at a cost around $400, gradually gaining in value throughout 2022 until a sharp upturn from $ane,492 on November. 1 to around $2,574 on Dec. xv, when the company unveiled the commutation acquisition and appear a suspension of investor withdrawals.

FoPay suspended Foin withdrawals until Dec. 31, 2022 ostensibly due to the merger with AliExchange, stating that, "FOIN withdrawal service will resume on 1st January 2022. At that place volition exist NO further extension after this terminal deadline."

Since the announcement of suspended withdrawals, the Foin price has surged fifty-fifty further to around $3,200 at press time, representing a near 70% calendar month-on-calendar month cost increment.

Foin price movement. Source: cmc.io

Foin toll movement. Source: cmc.io

Previous statements from the firm suggest that FoPay believes that not allowing investors to liquidate their assets immediately will aid enable a healthy, long-term investment strategy. In an AMA in Apr 2022, the organisation said:

"Experience in the crypto market shows u.s.a. that there is always a definite number of panic sellers that make price dive. Nosotros took care of it and build a proper strategy to fix this issue. Such users aren't into long-term investments and don't want to get good value out of information technology, they're interested in short profits and seem to not understand how investments piece of work. For everyone who trusts in crypto, nosotros're preparing the whole ecosystem for circulation and deposit grow due to this circulation."

Over 90% of Foin trading volume is concentrated on Estonia-registered cryptocurrency exchange P2PB2B.io. The P2PB2B website was registered with an bearding domain registration proxy service DomainsByProxy, whose motto is "Your identity is nobody'southward business organization but ours."

Foin trade volumes by exchange. Source: CoinMarketCap

Foin merchandise volumes by exchange. Source: CoinMarketCap

The but other crypto exchange where Foin is listed is HotBit. The domain of the exchange is also registered with DomainsByProxy.

On its website, HotBit claims to be registered in both Hong Kong and Estonia. Even so, Cointelegraph could not locate any business organisation registration for HotBit in Estonia, but finding its Hong Kong registration.

Furthermore, Foin trades at two radically different prices on each commutation. At press time the token is trading aroune $3,200 on HotBit, while it has heaven-rocketed to $4,000 on P2PB2B.

Connections to blacklisted firm

Initially, the Foin token was managed past the at present-defunct site Fiscal.org, which claimed to exist registered in the United Kingdom. According to the Financial Bear Authority, the U.K.'due south financial watchdog, Financial.org provided investment services without regulatory potency.

To that end, the FCA included Financial.org to its watchlist last May and warned investors against dealing with the firm. At the fourth dimension, some Foin investors told Reuters that Financial.org notified them that it would close their accounts and take twenty% of their funds if they did not increment their minimum investment from $3,000 to $ten,000.

That same month, financial regulators in the United Arab Emirates, Malaysia, Singapore, Republic of indonesia and Thailand also put Financial.org on warning lists of unauthorized firms.

Moreover, the Foin folio on crypto data aggregator CoinMarketCap contains a warning stating: "We accept received reports that Foin is affiliated with Financial.org, an organization that is on the watchlists of a number of regulators. Please perform your ain due diligence."

An employee at Dun & Bradstreet — a corporation that offers data on commercial credit as well as reports on businesses — confirmed to Cointelegraph that there was simply 1 visitor on their global database that is registered with "Financial.org" in its name. The company is chosen "Viet Nam Financial.org Investment Company Limited" and is registered in Vietnam nether the Investment License Lawmaking 0314733223.

Through a search on Vietnamese business registries, it proved possible to observe a legal entity containing "Financial.org" in its proper noun, with the registration number matching that of "Viet Nam Fiscal.org Investment Company Limited":

Source: EMERHUB

Source: EMERHUB

On its official Facebook folio Financial.org Vietnam, the visitor has actively promoted Foin-related products, including Foin Existent Estate and accepting the token equally a ways of payment for luxury cars, also as purported partnerships with crypto payment solution providers. One user review states that Foin "is a way to make money while you sleep."

Investor concerns follow transfer scheme

In June 2022, Financial.org unilaterally converted investors' dollar accounts into its own Foin tokens and blocked them from withdrawing funds, afterward which information technology moved Foin wallets to a migration portal called FoinWalletMigration.com (FWM).

In September 2022, Financial.org ceased its operations, according to a notice on its website, which stated, "We have stopped operation. Instructions on how to claim your token(south) were distributed in August 2022."

In mid-Nov, FoPay required investors to motion their tokens from FWM to its platform, with a required fee of $viii.75 for each token. The borderline to withdraw Foin tokens was set for Dec. 2, 2022.

The company stated, "FoPay will Non be responsible for any failed Foin transfers from FWM every bit we are not able to follow up and trace any payments and transfers. Delight refrain from asking FoPay questions with regard to FWM because we are not able to answer on behalf of FWM."

The company's requirement caused an immediate backlash from Foin holders, leading many users to think that Foin is probably coming to the end of its existence. Comments from token holders began circulating on social investing platform Investing.com:

"Anybody was angry considering the company forced people to pay more to withdraw FOIN dc, while there was no guarantee that FOIN would have a good price when it came out on December 3."

"Foin toll is going upwardly continuously, its unlogic , anybody tin can explicate it?"

"Beloved friends, don't invest in Foin Company I swear information technology has been more than two years since I bought 4500 Foin simply information technology is not marketable and my life is in trouble"

"Side by side 1st January, if FOIN'south direction still postpone withdrawal from fopay equally investor what is our try to go back the coin"

"At the time being I do non really take any value for serious. cause FOIN is non actively traded. For example, while I am writing this post, this forum - at the top of the page - shows a current value of USD 3.192,97, whereas my FoPay wallet shows USD ii.707,29 ... and then I just wait up to the 15th, the announced start of trade, and then we all know the real value of FOIN. Casino pure, correct?"

Some users started to suspect that Foin's volume was not existent and questioned the creation of the FoPay wallet. Others apparently believed that the Foin price would even slump to zero after December. 2.

Registrations with regulators

According to Bisnode, a Swiss commercial register and credit rating information source, the Foin Foundation was founded in the country in 2022 and registered as a non-turn a profit organisation in the county of Zug. The Foin Foundation says its purpose is to support and promote research into blockchain and promote the training of talents and startups that operate in the blockchain sphere.

A spokesperson from the Swiss Financial Market Supervisory Authority (FINMA) told Cointelegraph that "the company mentioned has no authorisation from FINMA."

Cointelegraph reached out to the Foin Foundation to clarify its relationship to Financial.org, simply it has not nevertheless replied.

The Estonian Financial Intelligence Unit (FIU) confirmed to Cointelegraph that AliExchange has three valid business licenses in Republic of estonia: i for operating as a financial institution, one that allows it to operate every bit a cryptocurrency commutation, and another that allows the company to offer users a cryptocurrency wallet. The showtime license was granted on May 7, 2022 while the other two were granted in the start week of Nov 2022.

FoPay is owned and operated by Ukraine-registered company "Foins Blockchain Limited Liability Company," registered nether the identification code of the legal entity 42019553.

Upon registration, the founder of Foins Blockchain was indicated as Moldova-based individual Dmytro Lunhu, while the director as Ukrainian citizen Yevhen Petelin. According to the Foin official weblog, the CEO of FoPay is Ruslan Salatov.

Cointelegraph reached out to Salatov for comment via LinkedIn, but did non receive a response as of press time. Salatov'southward LinkedIn page does not mention whatever of his piece of work on Foin, FoPay or seemingly related enterprises.

At press time, none of the organizations accept responded to Cointelegraph's requests for comment regarding their relationship to Financial.org or to each other. This story volition be updated with their comments should they respond.

Due diligence on new token projects

While cryptocurrencies and digital assets are seeing increased adoption globally, problems of fraud and murky business practices still persist. As Cointelegraph has previously reported, cryptocurrencies accept become a hotbed for scam activity thanks in role to the lure of anonymity and heterogeneous regulations and standards. By August 2022, crypto investors worldwide had lost $4.three billion to scams, according to data from cryptocurrency analytics firm CipherTrace.

Investors in new digital assets should exist aware of certain warning signs such as errors and bad inquiry in a project's whitepaper, hyperbolic claims nigh profits and scant details regarding the projection's staff and development.

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