Exploring Concerns Over Crypto Token Price Manipulation
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Allegations of Manipulation in the Crypto Market
The digital currency market is under scrutiny as concerns rise over the manipulation of cryptocurrency prices. Arthur Cheong, the CEO of DeFiance Capital, has voiced significant apprehensions regarding the reliability of crypto token valuations. He claims that coordinated efforts between market makers and centralized exchanges (CEXs) are fostering an environment where price manipulation is rampant.
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The Lack of Transparency in Crypto Pricing
In a statement shared on the social media platform X, Cheong expressed that the crypto landscape is marred by a lack of transparency. This lack of clarity has led to artificially sustained prices, posing substantial risks for investors. The intricate relationships between crypto projects and market makers have created an opaque “blackbox” scenario. This environment leaves both retail and institutional investors in the dark, uncertain if token prices are driven by genuine supply and demand or if they are the result of manipulative practices.
Impact on Market Confidence
Cheong warns that these practices could severely undermine investor confidence, potentially rendering much of the crypto market “uninvestable.” He criticized centralized exchanges for their inaction, highlighting that this unchecked behavior is eroding trust within the altcoin market.
He further pointed out that tokens launched through Token Generation Events (TGEs) often see rapid value depreciation. Many newly listed tokens have plummeted by 70% to 90% shortly after their release. Cheong stated:
“If industry leaders fail to address these issues, a significant portion of the market will remain uninvestable for the foreseeable future.”
Community Reaction to Market Manipulation Claims
In support of Cheong’s assertions, crypto analyst Miles Deutscher provided data showing that of the 27 tokens listed on Binance this year, only three have maintained positive price momentum. The remaining 88% have experienced notable declines, with losses ranging from 19% to as much as 90%. Deutscher attributes this trend to the decreasing participation of retail investors.
The community’s response to these revelations has been mixed. Some members are urging exchanges like Binance to demand greater transparency and disclosure from projects before listing them. A user known as Zack commented:
“CEXs should demand more transparency and disclosure before they list assets. Hey, @binance @coinbase, maybe it’s time to start self-regulating. The party will end sooner or later, and regulations will tighten, especially in the EU.”
Divergent Views Within the Community
Conversely, another faction of the community believes that most cryptocurrencies are inherently valueless. They argue that speculation drives initial price increases, but without intrinsic value, these tokens are destined to fail. A user named Kun expressed:
“It’s not an issue because if it was worth it, you’d buy it. If the value of a crypto business token relies solely on price, that’s speculation, not investing. Most tokens are inherently worthless, and people don’t understand why they should own them.”
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