Within a mere 48 hours, the value of the WSB Coin (WSB) experienced a drastic decline, crashing from its peak at $0.00067279 to a record low of $0.00004827. This shocking turn of events can be traced to a moderator from the prominent trading subreddit r/WallStreetBets, who reportedly sold a significant portion of the WSB token. This project proclaims itself as the official memecoin of Wall Street Bets.
The Birth of WSB Coin and Its Connection to WallStreetBets
The WSB Coin was introduced on May 2 by individuals associated with the moderation of the WallStreetBets Reddit forum. The subreddit gained widespread attention for its role in the GameStop short squeeze in January 2021, which inflicted significant financial damage on multiple hedge funds.
When launching the WSB token, the creators declared that the team would not receive any allocation, and 10% of the coins would be set aside for the subreddit. The website explains:
“This is the fairest launch memecoin available, with no team allocation and no presale. We offer a free airdrop and some coins for the community. Ten percent of the $WSB supply is designated as a treasury for the r/wallstreetbets subreddit to use at their discretion.”
Allegations of Insider Trading and the Subsequent Collapse
However, a few days after its inception, a team member reportedly began offloading massive quantities of the token. On May 4, on-chain investigator ZachXBT revealed that “zjz.eth,” the individual responsible for managing the moderation bots for the subreddit, allegedly defrauded WSB investors. On-chain data indicates that zjz.eth exchanged WSB coins for 334 Ether, approximately $635,000.
The token’s price experienced a sharp drop following the sell-off, plummeting from its all-time high of $0.00067279 to its all-time low of $0.00004827 within two days. However, community members cautioned against purchasing the dip, as the moderators have access to 10% of the total supply.
Calls for Accountability and the Threat of Legal Action
In response to these events, another moderator known as WSBmod issued a warning, threatening to report those involved in the alleged insider trading to law enforcement agencies, including the police and the FBI, unless they come forward. WSBmod also called upon zjz.eth to return the funds.
As the WSB Coin saga unfolds, the cryptocurrency community and investors alike are reminded of the importance of vigilance and due diligence in digital asset investments. In addition, the fallout from this incident serves as a cautionary tale, highlighting the potential risks associated with the often unpredictable and volatile world of cryptocurrencies.
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