Worldcoin Hit With Scam And Manipulation Allegations

Worldcoin (WLD) has come under heavy criticism following a recent development, which led to talks about potential price manipulation by the team. Prominent crypto on-chain sleuth ZachXBT also reacted to these price manipulation allegations, suggesting that the Worldcoin team may actually be guilty of them. 

“Biggest Scam Token Of The Bull Run”

ZachXBT recently described Worldcoin as the “biggest scam token of the bull run” while calling out venture capitalists and team members backing the crypto token. ZachXBT’s remarks were in response to a piece by crypto trader and analyst DeFi Squared, which alleged that the Worldcoin team has been manipulating the crypto token’s price.

In his article, DeFiSquared claimed that the team manipulates WLD’s value, contrary to Worldcoin CEO Alex Blania’s claims that they do not control the market. He noted that an 11-figure valuation for Worldcoin is only possible due to the team’s tokenomics design. The crypto analyst further claimed that the team has, on many occasions, influenced the token’s daily price moves through the active changes it makes to emissions. 

DeFiSquared added that the team influences WLD’s daily price moves through market maker contracts and well-time announcements before unlocks. The crypto trader remarked that such action raises the question of why Worldcoin’s team continues to deny that they do not control the market. 

Meanwhile, the crypto trader suggested that the team’s recent announcement about Worldcoin’s token unlock schedule was aimed at manipulating the coin’s price. Worldcoin announced that they were extending the unlock period for 80% of the tokens held by team members from three to five years. 

DeFi Squared stated that it is likely not a coincidence that the team waited until one week before the unlock period before releasing this positive news. WLD is known to have surged by over 30% on the back of the news. The crypto analyst remarked that the news has proven “incredibly effective” in coercing retail investors to provide higher prices and more liquidity for insiders to exit their positions when the unlock period begins on July 24. 

Retail Investors Serving As Exit Liquidity For The Worldcoin Team Me

DeFi Squared revealed that Korean retail investors account for most of those currently holding the WLD token and keeping the coin’s valuation so high heading into the token unlock period. He suggested that these investors may not even understand the severity of Worldcoin’s tokenomics design and how they are possibly used as exit liquidity by team members. 

Interestingly, the South Korean government opened an investigation into WLD earlier this year over privacy concerns and how the team collects users’ data. In addition to price manipulation allegations, the Worldcoin team has also been accused of breaching data privacy laws in several countries by using the “Orb” to acquire user data in exchange for WLD tokens. 

Featured image created with Dall.E, chart from Tradingview.com