Coinbases Airdrop Fiasco: An Influx of Lawsuits and Critics

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On January 10, Flare Networks began distributing free FLR tokens to XRP holders in a highly anticipated airdrop event. To qualify, participants had to provide proof of their XRP ownership via a screenshot taken in December 2020.

Participating exchanges distributed the FLR tokens, but the value of the incentives was lower than expected. Additionally, the FLR token hit an all-time high of $0.15 on the day of the airdrop, but within a week its value had dropped 71.5% to trade at $0.00041 at the time of writing. lines.

Airdrop has proven costly for Coinbase

Disgruntled customers of cryptocurrency exchange Coinbase have launched a class action lawsuit against the company for not providing them with Songbird and Flare tokens.

According to a complaint filed in the United States District Court, Plaintiff Dallas Woody is conducting the lawsuit on behalf of himself and others in similar Flare Airdrop situations. The lawsuit also names Coinbase CEO Brian Armstrong.

The running of Project Flare has also drawn criticism from members of the cryptocurrency community, with some referring to it as a Ponzi scheme and others expressing disappointment with the limited incentives and tight deadlines for the piece.

Ripple’s CTO, David Schwartz, also recently took to Twitter to voice his disapproval of the airdrop and provide some constructive criticism. He pointed out that under current regulations, there is no incentive to hold onto FLR tokens in order to receive additional airdrops, and that holders of Flare tokens have nothing to lose by selling them immediately.

As the situation evolves, there is growing evidence that Project Flare could be a Ponzi scheme, raising more questions and causing new problems for the industry.

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