We have already spoken to you about theICP Token and we presented it as one of the most anticipated projects of the year. Which is a fact. We were delighted with the release of this project which had been at the idea stage since 2016.
However, while most projects as ambitious as Solana for example, it did not achieve the long-awaited success. It's even quite the opposite that happened and many early investors lost (a lot).
Let's take a quick recap of the situation and see why the ICP token "messed up" its entry into the cryptosphere so much.
Why a 90% drop
The Dfinity Foundation wants to enter the Cloud Computing industry with a bang, a market worth hundreds of thousands of dollars. Behind ICP (Internet Computer Protocol), there is the idea of being able to create decentralized versions of the largest applications currently popular on the web.
Yes, imagine Linkedin, Uber, Facebook and many other applications that would be developed with ease (with Dfinity's own programming language). The ICP token then serves as a governance token to pay transaction fees and also as rewards for network validators.
For its launch, ICP managed to be listed on Coinbase on May 10th and with the "Coinbase effect", all investors naturally expected a price surge. The token traded at nearly $700 before quickly reaching the colossal fall of approximately $30.
Typical insider trading?
Many people were stunned by such a fall. For a project of this scale, this is frankly an unusual situation.
Many people have accused the project of being guilty of insider trading.
We remind you that insider trading consists of an investor carrying out transactions using information which is confidential in nature and which is not available to other investors
A crypto research company called Arkham Intelligence published a comprehensive report to explain the 90% drop in the price. What we can read in summary in the report is that there were people with bad intentions (within the Dfinity project itself) who would have resold the token en masse as soon as it was listed.
The report highlights the fact that Dfinity had enormous communication problems, a poorly implemented vesting system and scandalous operational blunders (early investors were unable to open their wallets and retrieve their tokens, due to bugs). computers).
Obviously, the CEO of Dfinity considered the report Arkham as being a tissue of lies.
Final word on the ICP token and start of legal problems
You should know that there is a class action lawsuit that has been formed in California against Dfinity (the foundation behind the ICP token) who claim that the ICP token was created as financial securities ( securities) not legally registered. This may remind you of the ongoing trial Ripple (XRP) is experiencing with the SEC. Thus, this group of disgruntled investors also gives bad press to the ICP token which did not need it.
The project was supported by the largest investors and venture capitalists including Andreessen Horowitz (and his famous a16z), Polychain and Amito Capital. The latter are then also the target of complaints.
Finally, let us say that very clearly Dfinity was not very transparent throughout its process. The worst part is that it was the first investors (those who believed in the project from the start and without whom, nothing would have been possible) who were the first to be harmed.
We can understand their dissatisfaction at discovering such market manipulation which made it possible to enrich only a few investors. We don't yet have a hard truth about the situation, but we still know that the price has fallen by 90% and that in general, such a fall can be explained by a price increase. whale.
In any case, such a trial cannot be concluded in a few days, nor in a few months...It's a shame for such an ambitious project.
Nothing is too late however and we sincerely hope that the team will be able to get back on track.
Otherwise, always invest in projects where the vesting is clear and always do your own research. We are painfully reminded with ICP that even the largest projects are not safe from internal scams…
Available resources:
- Le Dfinity.org website
- The report Arkham Intelligence
- The article on Dfinity
Watch the video on the fall of theICP token and Dfinity
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Disclaimer : This article is provided for informational purposes only. This is not financial, legal, tax or investment advice. Always do your own research before investing in any crypto.
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