It’s true that the realm of cryptocurrency trading teems with rewards and potential high returns. However, a recent report from the Network Contagion Research Institute (NCRI) unveils another face of this ostensibly lucrative territory, one tainted with questionable activities and potential manipulation. It seems the path to crypto gold might not always glitter.
According to the NCRI, ‘inauthentic chatter’ on Twitter appears to have been influentially derailing the market trends of certain crypto tokens – BOBA, GALA, IMX, RNDR, and SPELL – all of which were held by quant trading firm Alameda Research, helmed by Sam Bankman-Fried, before becoming officially listed on FTX. Alarmingly, these suspicious social media activities magnified post-listing, accounting for about half of all Twitter posts regarding these tokens.
In a situation that appears to echo the ‘pump-and-dump’ scheme, the prices of these tokens surged by up to 30% following the wave of dubious tweets. Could these ‘inauthentic’ posts have been designed as strategic pieces in a grand cyber chess game aiming to manipulate market sentiment and trading behavior around these tokens?
Moreover, it’s worth noting that an earlier report from Argus, a compliance firm, highlighted Alameda’s ability to leverage insider information to profit a cool $60 million from several tokens prior to their FTX listings. Evidence of unusually close ties between Alameda Research and its sibling company, FTX, surfaced in a CoinDesk report last fall, suggesting that these sudden price surges were not just luck.
An explicit illustration of this event is the token Render (RNDR), which saw its price rise between 11% and 30% on four different occasions within 24 hours between 2022 and 2023. This unexpected inflation came without any concrete commercial reason, which raises eyebrows in the market.
Bankman-Fried currently faces federal securities and wire fraud charges, hinting at potential oversight and regulatory actions. While these accusations looming in the horizon might alter the crypto landscape significantly, it opens the broader question of how crypto regulation should be effectively implemented and monitored.
A healthy skepticism towards such incidents is essential for the maturation of the crypto industry. While this episode has triggered widespread cynicism, it also provides a crucial opportunity for the community to evaluate, learn, and apply the appropriate preventive measures to ensure a fair and upright trading environment. Let’s hope that this event stimulates constructive discussions in devising a regulatory blueprint for the crypto world.
Source: Coindesk
