Crypto Sleuth Unmasks Worldcoin Insider Trading Scandal Ahead Token Unlock

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As a seasoned researcher with extensive experience in the crypto space, I find the allegations against Worldcoin deeply concerning. The recent investigation by ZachXBT and DefiSquared has shed light on questionable practices and potential insider trading activities within the project.

In a recent revelation, well-known crypto sleuth ZachXBT has brought attention to possible insider trading activities and suspicious behaviors from the Worldcoin team, as they approach a major token release. This investigation, which expands upon findings by prominent Bybit trader DefiSquared, sheds light on various techniques employed by Worldcoin to influence their token’s price. Additionally, it casts doubts on the project’s honesty and the intentions of its supporters.

Insider Trading Allegations On Worldcoin

In their article, DefiSquared delves deep into the token economics and marketing plans of Worldcoin. According to DefiSquared’s analysis, Worldcoin will initiate insider unlocks with only 2.7% of the total supply being in circulation. The piece explains that the team has carefully managed the price to preserve a $30 billion fully diluted valuation (FDV), even as they deny any role in manipulating prices. A more conversational way of paraphrasing this could be: DefiSquared’s article offers an in-depth look at Worldcoin’s token economics and marketing approaches. According to the analysis by DefiSquared, Worldcoin will start releasing insider holdings with only 2.7% of the tokens currently circulating. The article reveals that the team has carefully orchestrated price movements to sustain a $30 billion fully diluted valuation (FDV), while maintaining that they have no hand in price manipulation.

At the inception of Worldcoin, there were already 1.4%, or 140 million, circulating WLD tokens in existence. The team set aside 100 million of these tokens for market makers, giving them the right but not the obligation to repurchase a substantial amount of tokens at approximately $2.5 each.

The strategy aimed to keep the price from reaching unsustainable heights, a concept that Worldcoin CEO Alex Blania had earlier advocated against reaching “$10,” which he deemed “terrible.” However, despite this, Worldcoin chose not to renew their market maker contract in December. Consequently, the price soared up to almost $12 within a month.

Discrepancy In Actions & Statements

Recent studies highlight a notable contradiction between Worldcoin’s public declarations and observable actions regarding its token. Although the team maintains that they have little influence over the token price, their management of market maker contracts, emissions, and token economics indicate otherwise. This inconsistency casts doubt on the project’s transparency and fuels speculation about the true motivations behind its limited circulating supply.

ZachXBT has raised concerns about several aspects of Worldcoin’s operations. DefiSquared brought attention to an inconsistency in Worldcoin’s reasoning for maintaining a low float, which was initially presented as a means to prevent unfair distribution for universal basic income (UBI). However, DefiSquared’s analysis indicates that insiders will control over 60% of the circulating supply within a year. This development is more beneficial to insiders than UBI recipients.

A more natural way to phrase this could be: Upon closer examination, it was discovered that the Orb Operators, in charge of gathering biometric data, have been transferring substantial quantities of WLD to platforms such as Binance. One operator alone was moving approximately $150,000 worth of WLD to Binance every three days during March’s price surge to $12. This behavior implies that insiders are capitalizing on market situations to sell off their assets.

Allegations Against VCs & Sam Bankman-Fried

One troubling discovery is that approximately one quarter of all circulating Worldcoin (WLD) tokens reside on Bithumb, a prominent South Korean cryptocurrency exchange. This significant portion is controlled by retail investors, who may not be fully versed in the complex token economics of Worldcoin. Unintentionally, these individuals are bolstering WLD’s value.

Based on my extensive experience in the crypto market and having closely followed the developments of Worldcoin and its associated token, I can’t help but be concerned about recent events. The situation has taken a turn for the worse due to the Worldcoin Foundation’s aggressive selling of tokens to trading desks. This action has resulted in significant losses for many token holders, with some reporting a 70-80% decrease in value over the past few months.

Prior to last week’s scheduled insider unlocking event, Worldcoin disclosed a slight adjustment to the selling pressure mechanism. This modification sparked increased retail engagement and improved market liquidity for insiders looking to sell. The investigator hypothesized that someone privy to this confidential information within the team or their network may have exploited it to reap profits before the announcement became public knowledge. He emphasized the significant price surge in WLD 24 hours prior to the announcement as evidence supporting his theory.

In a recent post on the X platform, Worldcoin declared a focus on keeping things straightforward for the benefit of all humans. However, ZachXBT voiced concerns, labeling the project as allowing select insiders to reap profits from what he deemed a “fraudulent token,” while allegedly developing altruistic tools. He has publicly condemned Worldcoin’s team and investors, branding them as deceitful individuals.

He additionally took stern actions against venture capitalists and other financiers who supported Worldcoin. Notable figures among them are Nick Tomaino, former executive at Coinbase, Sam Bankman-Fried, founder of FTX, and 3AC. ZachXBT alleges that these individuals were involved in what he describes as “the largest scam token during the bull market.”

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2024-07-17 14:46