Worldcoin, a project aiming to establish a global digital identity system, is facing accusations of insider trading and price manipulation surrounding its native token, WLD. These allegations come amidst a recent decision to delay the unlocking of a significant portion of the token supply.
On July 17th, DeFi Squared, a decentralized finance (DeFi) analysis account, published a post alleging that Worldcoin manipulated the price of its WLD token. Additionally, the post raised concerns about potential insider trading within the project, suggesting someone with access to confidential information might have preemptively purchased tokens before the announcement of the delayed token unlock schedule.
Further fueling the fire, prominent blockchain investigator ZachXBT echoed these sentiments, labelling Worldcoin’s token a “scam” and accusing team members and venture capitalists of profiting from it. He considers this situation to be “the biggest scam token of the bull run.”
Worldcoin, however, vehemently denies these allegations. A spokesperson stressed the organization’s “zero tolerance” for insider trading and stated that both the Worldcoin Foundation and Tools for Humanity (the contributor behind the project) take such accusations seriously, even if unsubstantiated. They emphasized their commitment to maintaining a strict market integrity policy and have not found any evidence to support the claims.
The spokesperson further explained that individuals covered by their policies are prohibited from disclosing confidential information that could influence WLD buying decisions. Additionally, they claim to have been under an “active blackout period” during the relevant timeframe, preventing any WLD trading activity by insiders.
These accusations coincide with a controversial decision by Worldcoin. On July 16th, Tools for Humanity announced a two-year delay in unlocking 80% of the WLD supply initially allocated to team members and investors. This move sent the token price soaring by 68% in just two days, propelling it to one of the top gainers on CoinGecko at the time.
The price surge raises questions. Did the delay announcement trigger a buying frenzy, leading to the observed price increase? Or did insiders capitalize on this information beforehand, as some allege? Worldcoin maintains that the delay was necessary to ensure a more sustainable token distribution model.
The situation highlights the ever-present vulnerability of the cryptocurrency space to manipulation and insider activity. While Worldcoin denies any wrongdoing, the lack of transparency surrounding the token unlock delay and the subsequent price hike leaves room for speculation.
Independent investigations and a thorough review of Worldcoin’s market integrity policies are crucial to address these concerns. Only then can the community regain trust in the project and its token. Investors are advised to exercise caution and conduct thorough research before making any investment decisions related to WLD.