In the crypto money world, there have been important developments for some altcoins recently. The Adventure Gold (AGLD) token has recently been involved in a serious pump and dump event. Accordingly, this has sparked concerns about potential market manipulation. AGLD’s price fluctuates sharply, while investors and regulators are keeping a close eye on the situation.
Sudden price fluctuation stretches the nerves
On July 20, the price of AGLD skyrocketed above $1.4. However, the enthusiasm was short-lived as the token quickly dropped to $0.68 on July 21. Accordingly, this situation triggered suspicions of a pump and dump game. The sharp drop in value has caused many to question whether market manipulation is involved.
DeFi^2, a famous Bybit trader, took it upon themselves to investigate the matter. Their research shows that three accounts on the Bybit leaderboard joined just five days ago. It also revealed that it only trades the AGLD U-margin perpetual contract. Surprisingly, these accounts quickly made a staggering $1 million in profits. This has raised concerns about potential market manipulation.
Vulnerabilities for lower value altcoins
The Adventure Gold (AGLD) token dates back to its release on September 2, 2021 as an ERC-20 token for the Loot NFT project. An airdrop allowed Loot NFT holders to claim 10,000 AGLD tokens for free. On the other hand, in the token’s first trading days, it briefly reached up to $70,000 per NFT. The promotion of airdrops and the popularity of NFT attracted a lot of attention, leading to an early price increase.
Similar price movements were experienced by StormX (STMX), which traded at $0.0046 mid-week, rose to $0.015 and then dropped to $0.0076. STMX ranks 266th with a market capitalization of $84 million.
Tighter regulations to protect investors
Looking at cryptokoin.com, the latest incident reveals the weak points of such projects, where market manipulators take advantage of the relatively low liquidity of smaller value tokens like AGLD. Artificially inflated prices allow these people to quickly sell their holdings. On the other hand, it leaves other investors who buy at inflated prices with significant losses.
Regulators are grappling with the challenges posed by the decentralized nature of cryptocurrencies and the prevalence of pump and dump schemes. These illegal activities harm market integrity. It also undermines the confidence of individual investors.
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