In a surprising turn of events, the cryptocurrency market maker Gotbit found itself at the center of controversy after allegedly selling $4 million worth of WATER tokens, leading to a 70% price drop for the newly launched token. The incident has sparked concerns within the crypto community about the trading practices employed by Gotbit and the potential impact on the WaterCoin (WATER) project.
Is the #WaterCoin team selling $WATER?
We noticed that the dev transferred 844.44M $WATER to 11 new wallets that didn't participate in the pre-sale.
These 11 wallets are selling $WATER and have obtained more than 18,600 $SOL($2.35M) by selling $WATER! pic.twitter.com/PWItcb06RN
— Lookonchain (@lookonchain) June 24, 2024
Key Takeaways
- Gotbit, a cryptocurrency market maker, was identified as one of the entities responsible for the 70% price drop of the WATER token shortly after its debut on DEXs.
- Gotbit acknowledged selling $4 million worth of WATER tokens, claiming it was part of its market-making operations.
- Gotbit later backtracked, stating its role was to provide “equal opportunities for all presale investors” and that it lowered the price to a “fair level” to protect the community.
- The price of WATER remains 88% below its debut value, and the WaterCoin team has not made any public statements on the matter.
- This incident underscores the need for greater transparency and accountability in the cryptocurrency market, particularly regarding the activities of market makers.
The Allegations
According to on-chain analysts at Lookonchain, wallets associated with the WaterCoin team began aggressively selling WATER tokens as soon as trading commenced on decentralized exchanges (DEXs). This sudden influx of sell orders was seen as a significant contributor to the token’s dramatic 70% price decline.
“Is the #WaterCoin team selling $WATER? We noticed that the dev transferred 844.44M $WATER to 11 new wallets that didn’t participate in the pre-sale. These 11 wallets are selling $WATER and have obtained more than 18,600 $SOL($2.35M) by selling $WATER!” – Lookonchain
On-chain analysts are worried about the "team" sales of $WATER tokens. However, most of these sales were conducted by Gotbit as part of MM operations. Why did we sell and what GHF is doing with $4M profits from these sales?
Read in the thread below pic.twitter.com/zI6QhWsroQ
— Gotbit Hedge Fund (@gotbit_io) June 27, 2024
Gotbit’s Response
In response to the allegations, Gotbit, the market maker founded by Russian trader Alexey Andryunin, acknowledged its involvement in the WATER token sales. The firm claimed that it was responsible for the majority of the WATER token sales as part of its market-making operations. Gotbit stated that it had made $4 million from these sales, which it attributed to the token’s unexpected price surge and the activities of “several independent snipers.”
“Some of them incurred losses due to Gotbit’s active selling. We took the money from the snipers and used it to support the price for 2-3x from the presale!” – Gotbit
However, in a subsequent post, Gotbit backtracked, stating that its role as a market maker was to provide “equal opportunities for all presale investors” and that it had lowered the price to a “fair level” to protect the community from potential -90% losses.
The Aftermath
Despite Gotbit’s claims, the price of WATER remains 88% below its debut value as of June 26. The WaterCoin team has not made any public statements regarding the trading practices, leaving the crypto community to speculate on the long-term implications for the project.
This incident has once again highlighted the need for greater transparency and accountability within the cryptocurrency market, particularly when it comes to the activities of market makers and their potential impact on token prices.
