The conflict between Dohrnii Labs and Blynex has intensified into a legal dispute. Dohrnii Labs, a blockchain-based learn-to-earn platform, has filed a police report in the United Arab Emirates against the cryptocurrency exchange Blynex. The issue revolves around the unauthorized liquidation of Dohrnii’s DHN tokens, which led to substantial financial losses for the company.
Promised Loan Trigger Conflict
Dohrnii Labs claims Blynex did not fulfill a promised loan, illegally liquidated their collateral, and blocked access to their remaining tokens. On March 23, Dohrnii Labs deposited 12,649.99 DHN tokens, valued at over $500,000, with Blynex. The company asserts that 8,650 DHN tokens were used as collateral for a 30-day loan in exchange for 80,000 USDT, but they never received the loan. Despite this, Blynex allegedly liquidated the collateral, selling it on Uniswap for 149,151 USDT, which negatively impacted DHN’s market value. Additionally, Dohrnii Labs has been unable to withdraw its remaining 4,000 DHN tokens, prompting them to seek legal action. Dohrnii Labs demands the immediate return of its 4,000 DHN tokens and full reimbursement of the USDT generated from its collateral. The company has also reached out to local regulators to escalate the issue.
Blynex’s Response: Claims of Risk Management
Blynex has responded by stating that the liquidation was part of their “automated risk management system.” Co-founder Mike Baskes explained that their system detected a high-risk scenario where the liquidity of the DHN token was too limited to maintain collateral during a market downturn. He claimed that the liquidation generated 145,000 USDT, reinforcing their decision to act quickly. Baskes added that the available liquidity for DHN was about $315,000, complicating token sales without affecting the price. Blynex insists that the liquidation was necessary to prevent further losses. However, Dohrnii Labs refutes Blynex’s justification, arguing that the liquidation was unwarranted as the collateral was nearly double the value of the unissued loan.
Dohrnii Labs maintains that Blynex’s actions were an unjustified seizure of assets. Blynex has reportedly tried to resolve the dispute by offering Dohrnii Labs 80,000 USDT and the release of 4,000 DHN tokens if all legal proceedings are dropped. Dohrnii Labs rejected this offer, asserting that the 4,000 DHN tokens belong to their users and are non-negotiable. They insist that the right to withdraw these funds should not be contested.
Vitalik Buterin’s Involvement and Market Impact
The Dohrnii Labs dispute with Blynex coincides with another significant event affecting DHN’s market performance: Ethereum co-founder Vitalik Buterin’s unexpected liquidation of DHN tokens he received for free. In January 2025, Buterin was sent 10,000 DHN tokens without his consent. On March 18, Buterin sold 5,000 DHN tokens, netting 65 ETH (approximately $124,000), triggering a mass liquidation event that caused a “flash crash” in DHN’s price. The token price fell from $38.50 to $20.69, a 50% reduction. Despite a partial recovery, the token remains down 11% for the week. Dohrnii Labs has proposed an over-the-counter sale for Buterin’s remaining 5,000 DHN tokens to prevent further market instability. Blynex has not provided any official statements beyond their initial defense of the liquidation. Meanwhile, Dohrnii Labs is steadfast in pursuing legal action, seeking justice through regulatory channels and potentially collaborating with other affected parties for a joint lawsuit.
Twitter
– Transparency Update 🚨 We’ve filed a police report in the UAE against @Blynexex and affiliated individuals. Our team attempted to withdraw 4,000 DHN nearly 24h ago, but the transaction remains blocked with no response. We never received a loan, yet @Blynexex liquidated our assets. — Dohrnii Labs (@Dohrnii_io)
– Statement regarding @Blynexex $DHN sell: On March 23, 2025, the Dohrnii team deposited a total of 11,850 DHN, valued at approximately $550,000, to @Blynexex across five transactions. Of this amount, 8,650 DHN (worth around $360,000) were used as collateral for a 30-day loan. — Dohrnii Labs (@Dohrnii_io)
