Worldcoin (WLD) is the subject of criticism by several crypto experts on social media, who slam the project and related venture capitalists (VCs) for shilling “the biggest scam token of the bull run.”
Since its inception, the Worldcoin project has been involved in various controversies even as it commits to fixing the biggest issues of AI.
Worldcoin Faces Severe Backlash Over Price Manipulation
Onchain detective ZachXBT slammed Worldcoin for being a “scam project” after recent discoveries that the team manipulated the WLD price. ZachXBT calls out VCs and team members involved in the project, accusing them of being uninterested and not attempting to prevent such fraud. Among them are Coinbase executive Nick Tomaino, FTX founder Sam Bankman-Fried, and 3AC, whom ZachXBT calls enablers of this swindles.
“Shame on all of the VCs and team members who are complicit in the biggest scam token of the bull run and did nothing to prevent it,” ZachXBT wrote.
The investigator bases his critique on a recent report by DefiSquared, a trader on Bybit Exchange. The research dives into the WLD ecosystem and flags various price manipulation tactics within the Worldcoin project.
“This research piece brings to light exactly how the team is controlling the price to still carry a $30 billion fully diluted valuation as insider unlocks begin, while falsely claiming to have no involvement. All content is up to date with the latest vesting schedule changes,” the research begins.
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It also explores Worldcoin’s controversial tokenomics and market strategies. DefiSquared notes Worldcoin team allocated the majority of its supply to market makers to prevent price spikes, creating favorable price conditions. Eventually, they let the opposite happen, causing the Worldcoin price to rally by 100% in hours.
Highlighting deceit among project executives, DefiSquared shares how Tools of Humanity CEO Alex Bania denied any control over WLD price during Token2049 in Dubai.
The expose also highlights Orb Operators gathering biometric data and sending large amounts of WLD tokens to crypto exchanges like Binance. DefiSquared indicates an incident in March when the WLD price spiked above $12. When this happened, one operator moved roughly $150,000 worth of WLD to Binance every three days.
This, according to the report, is evidence of insider trading, with operators capitalizing on market conditions to liquidate their positions.
Investigator Addresses Worldcoin Unlocks
BeInCrypto reported about Worldcoin’s oncoming market moving token unlocks recently. DefiSquared slams this strategy, calling it a calculated move to entice retail.
“With this in mind, it’s likely no coincidence that Worldcoin waited until 1 week before unlocks to release positive news. Despite being only a small change to unlock selling pressure, the news has proven incredibly effective so far in coercing retail to unwittingly provide higher prices and more liquidity for insiders to exit in a week. Worse still, it appears likely (but not proven) that someone from the team or VCs used insider information to frontrun buying the news before it was even publicly announced,” — the analyst commented.
According to DefiSquared, Korean retail holds nearly 25% of all circulating WLD on Bithumb.
Read more: How to Buy Worldcoin (WLD) and Everything You Need to Know
Korean retail holdings of Worldcoin on Bithumb. Source: DefiSquared via Arkham Intelligence.In May, BeInCrypto also reported how DefiSquared took jabs at Worldcoin, calling it the biggest wealth transfer of this cycle. Citing “predatory tokenomics, the trader shared some calculations regarding the WLD token’s hyperinflation.
“These $200 million of tokens come from the deceptively named ‘Community’ allocation of WLD token supply, yet are being sold to adversarial parties to benefit the foundation,” DefiSquared noted.
These findings highlight the need for traders and investors to conduct comprehensive research into projects when looking to invest.
