Background
In a recent turn of events, two moderators from Reddit's r/CryptoCurrency community have been ousted for their involvement in insider trading of the Moons (MOON) token. This discovery comes after at least three wallets linked to Reddit group moderators dumped a substantial amount of MOON tokens just minutes before the official announcement of the closure of the blockchain-based points program.
Market Dump Raises Eyebrows
The market dump carried out by the three wallets drew attention from on-chain analysis accounts on X (formerly Twitter), such as Lookonchain. The timing of the dump, right before the official announcement, raised suspicions of insider trading.
The Reddit moderators reportedly had knowledge of the closure of the points program an hour before the official announcement. As a result, the token's value plummeted by almost 85% to $0.0198. However, two moderators managed to sell their tokens before the drop, allowing them to make significant profits.
Investigation and Consequences
Cointelegraph reached out to r/CryptoCurrency to understand the insider trading allegations and the subsequent investigation. According to U/mellon, a core contributor and MoonDust founder, two moderators have been removed from their positions, while three others are currently under investigation. The investigation aims to shed light on the extent of their involvement in the insider trading scheme.
The Points Program
The blockchain-based points program allowed participants on the Reddit platform to earn points and use them within the community. Users in the r/CryptoCurrency subreddit were rewarded with MOON tokens for their contributions, which they could freely exchange, tip, or use for other purposes in the community.
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