The Learn-to-Earn platform Dohrnii Labs has accused the UAE-based crypto exchange Blynex of liquidating its tokens without permission and failing to issue a promised loan, according to Cointelegraph.

PoL Phase 1 begins on Monday and the first whitelisted reward vaults have been approved. Full list and what's next at:https://t.co/EC0LUJKGGk pic.twitter.com/FB1w1UuzWX
— Berachain Foundation 🐻⛓ (@berachain) March 21, 2025

According to Dohrnii Labs, they deposited 12,649.99 Dohrnii (DHN) tokens worth over $500,000 on the exchange. On March 23, the company used 8,650 DHN as collateral for a 30-day loan in exchange for 81,000 USDT, but never received the funds.

Additionally, Blynex liquidated the 8,650 DHN position on Uniswap, receiving 149,151 USDT and causing the token’s market value to drop, Dohrnii Labs claimed.

“Attempts to withdraw the remaining 4,000 DHN were unsuccessful,” they added.

Blynex co-founder Mike Vasquez stated that the liquidation was part of their “automated risk management system.”

“Since 8,650 DHN was collateral, the system monitored the token’s liquidity and market conditions in real-time. When it became clear that DHN was struggling with liquidity and volatility, our system automatically liquidated the collateral,” he explained.

As a result of the liquidation, Blynex received 148,160 USDT.

“Dohrnii Labs’ claims that we liquidated nearly double the value of their loan are categorically false. We acted based on DHN’s market value at the time,” Blynex stated.

Dohrnii Labs was not convinced by Blynex’s explanation. The company has filed a police report in the UAE and is prepared to take legal action.

According to Cointelegraph, Blynex attempted to settle the issue by offering 80,000 USDT and allowing Dohrnii Labs to withdraw 4,000 DHN under the condition of a settlement agreement. However, Dohrnii Labs rejected the offer, calling it “unacceptable.”

“The 4,000 DHN in question are user deposits, not operating assets. The right to withdraw these funds should never be up for discussion,” the platform emphasized.

In late January, UAE-based crypto market maker CLS Global pleaded guilty to facilitating wash trading and market manipulation in favor of the NexFundAI token, which was created by the FBI as part of a fraud investigation.