Worldcoin faces allegations of price manipulation and scam just one day after announcing a delay in unlocking 80% of its native tokens. On July 16, Worldcoin developer Tools for Humanity (TFH) revealed changes to its token unlock schedule, extending the period for 80% of Worldcoin (WLD) tokens held by investors and team members.
Following the announcement, On July 17, decentralized finance (DeFi) insights account DeFi Squared published an extensive post on X (formerly Twitter) accusing the Worldcoin team of manipulating prices and misleading the market. They also suspect insider trading.
Defi Squared notes that Worldcoin appears to be intentionally propping up a token price that should be lower, and many of the reasons outlined are why I intend to be short WLD over the months following the start of unlocks.
What is the Extended Lockup Period?
The initial plan was to unlock these tokens over three years. However, the new update extends this period to five years, beginning July 24. Consequently, WLD tokens will be unlocked progressively over the next four years, concluding in July 2028.
This change means that fewer tokens will enter the market immediately, which could prevent a sudden price drop due to an oversupply.
According to data from the crypto tracker CoinGecko, this resulted in the prices of WLD rising by 68 percent in the first two days of the announcement. It went from $1.90 on July 15 to $2.81 on July 16, hit $3.20 on July 17, and found a slight correction to $3.11.
Why is it Accused of Market Manipulation?
While Worldcoin CEO, Sam Altman claims that they have no control over it, and that it’s simply driven by the market. Crypto Sleuths like Defi Squared and ZachXBT believe that’s a lie. They believe that an 11 figure valuation is only possible due to the team’s tokenomics design, and the token’s daily price moves have been on many occasions influenced by the team.
The post claimed that the team influenced daily price movements by strategically adjusting emissions, market maker contracts, and timing announcements before unlocking. The account also suggested that someone within the team might have used insider information to buy tokens ahead of the news.
Crypto investigator ZachXBT also commented, labeling Worldcoin as the “biggest scam token of the bull run.” He criticized venture capitalists and team members for their involvement and failure to prevent the alleged scam. ZachXBT accused the project of enabling insiders to profit from it.
The decision to extend the lockup period has placed Worldcoin under intense scrutiny. Allegations of price manipulation and insider trading have raised serious concerns about the project’s integrity.
Nevertheless, Worldcoin says the long lockup creates a stable market and develops a healthy ecosystem.
Also Read: Worldcoin Introduces World Chain Developer Preview for Mainnet
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