Key Takeaways :
- r/CryptoCurrency subreddit removed moderators linked to MOON token insider trading allegations.
- The subreddit confirmed its commitment to keeping the MOON token intact.
On October 17, Reddit made headlines by shutting down its innovative blockchain-based internet points program known as “Community Points.” Designed to reward creators and developers, the program allowed users to accumulate and spend community points through native coins like MOON.
However, the program’s closure was attributed to scaling challenges, leading to an unexpected turn of events within Reddit’s r/CryptoCurrency community, home to 6.9 million users.
In a dramatic twist, Reddit’s r/CryptoCurrency community took swift action by dismissing moderators who had reportedly engaged in trading the subreddit’s native token, MOON, just moments before Reddit’s official announcement regarding the program’s termination.
Reddit’s “Community Points” program held the unique feature of enabling users to earn and redeem community points using tokens, with MOON tokens being a central component of this system. Alarm bells began ringing when onchain data analysts at Lookonchain observed irregular trading patterns.
In the half-hour leading up to Reddit’s announcement, individuals with presumed insider knowledge, believed to be moderators, allegedly liquidated a substantial 456,353 MOON tokens, which equated to a value of $92,000 at that time.
Adding further intrigue to the controversy, someone executed a large sell-off of 363,227 MOON tokens just two minutes prior to Reddit’s official announcement. This sudden surge in selling pressure heightened concerns within the community.
In conclusion, the closure of Reddit’s “Community Points” program has not only shed light on the challenges of scaling blockchain-based systems but has also ignited a debate regarding the ethics of cryptocurrency trading, especially when it involves those with inside knowledge. The MOON token controversy serves as a reminder of the importance of transparency and fairness in the crypto and blockchain space.
Moments before the official announcement of the blockchain-based points program’s shutdown, which involved the use of specific cryptocurrencies unique to each community, three wallets executed a market sell-off. On-chain analysis accounts on X (formerly Twitter), including Lookonchain, drew attention to this significant market activity.
Insider trading remains a hot topic in traditional markets, but it becomes even more convoluted in the decentralized realm of cryptocurrencies. A recent incident highlights the pressing issues and intricacies involved in overseeing and controlling crypto trading.
