TLDR
- DeFi Development Corp. launched its DisclaimerCoin (DONT) meme coin on Thursday amid allegations of insider trading.
- A trader known as “8FziB” purchased a significant amount of DONT before the official public announcement.
- The trader acquired nearly 7% of the total supply, spending $4,000 before the firm’s official announcement.
- Blockchain data linked the trader’s wallet to another address with potential connections to DeFi Development Corp.
- DeFi Development Corp. conducted a review and confirmed the address belonged to an “early sniper” but did not address insider connections.
DeFi Development Corp. launched its new meme coin, DisclaimerCoin (DONT), on Thursday. However, the launch quickly became the subject of allegations involving insider trading. A trader, known as “8FziB,” allegedly purchased a large amount of the token before the official announcement, leading to accusations of unfair advantage.
DeFi Development Corp. Launches DisclaimerCoin Amid Controversy
DeFi Development Corp. (DFDV) launched its DisclaimerCoin (DONT) on Thursday. This move was promoted as part of the company’s ongoing experiment in the meme coin space. However, the launch faced scrutiny after blockchain data revealed that a trader began buying the token hours before the public announcement.
The trader, identified by the firm as an “early sniper,” reportedly bought around $4,000 worth of DONT tokens at an early stage. By the time DeFi Development Corp. announced at 8:30 a.m. ET, the trader already controlled nearly 7% of the token’s total supply. The price of DONT surged shortly after the announcement, leading to sizable profits for the trader.
Alleged Insider Trading Raises Concerns
Blockchain sleuths began noticing unusual patterns in the trader’s activities, sparking allegations of insider trading. The trader’s wallet, which had begun purchasing DONT tokens at a small market cap, was traced back to a Solana address with potential connections to DeFi Development Corp. The address funding the sniper’s wallet also held the company’s liquid staking token.
Ian Unsworth, co-founder of Kairos Research, pointed out the connection, noting that the wallet funding the trader held $30,000 of DeFi Development Corp.’s staking token. This raised suspicions about the involvement of the firm or insiders in the early purchases of DONT. On-chain observers also noted the connection between the alleged sniper’s wallet and a validator tied to the company.
Despite these concerns, DeFi Development Corp. conducted a review of the situation and maintained its stance.
“We are unwavering in our commitment to the highest standards of integrity,” the company stated.
However, they did not provide additional details about how the alleged sniper’s connection was traced or if the trader was known to the firm.
DeFi Development Corp. Responds and Burns Tokens
In response to the allegations, DeFi Development Corp. claimed to have acted swiftly. The company identified the alleged sniper and retrieved a portion of the tokens, worth over $1.5 million. These tokens, along with the $200,000 in Solana proceeds, were reportedly returned to the firm and later burned to remove them from circulation.
The burning of tokens led to a price surge, with DONT’s market cap reaching $35 million. The company did not elaborate on how it managed to retrieve the tokens from the sniper or whether they had any knowledge of the trader beforehand. Despite the controversy, the company stands by its commitment to transparency and ethical practices.
Shares of DeFi Development Corp. have experienced a 2.33% decline on Thursday, with a larger 73% drop over the past six months.
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