Data analyst Pledditor has uncovered a startling revelation regarding the sale of over 100,000 MOON tokens by three moderators associated with Reddit’s cryptocurrency forum. The sale took place just before the platform announced the discontinuation of its blockchain-based rewards service, ‘Community Points’.
Reddit’s Decision to Discontinue Community Points
On October 17, Reddit made an official disclosure regarding its plans to shut down the long-running ‘Community Points’ program by November 8. These Community Points were ERC-20 tokens initially minted on the Ethereum chain but later scaled to the Arbitrum Nova scaling network. Members could utilize these tokens to acquire badges, GIFs, and other features on Reddit.
The platform attributed its decision to discontinue Community Points to regulatory difficulties and concerns surrounding scalability. Despite the potential benefits that Community Points presented, Reddit faced challenges in scaling the program effectively across its entire ecosystem.
Moderators’ Insider Trading
The data revealed by Pledditor indicates that the three moderators took advantage of insider information by selling significant quantities of MOON, the native token of the r/CryptoCurrency community. Moderator “u/Mcgillby” reportedly transferred over 100,000 MOON tokens through various transactions on the Arbitrum Nova Blockchain, converting them to ETH with an estimated value of over $23,000.
Another moderator, “u/Rider_of_the_storm,” allegedly dumped 345,422 MOON tokens, estimated to be worth $71,963 at the time of transfer, to an exchange address that has yet to be linked to the user. Moderator “/u/IHaventEvenGotADog” also made an undisclosed MOON token transfer to Arbitrum Nova.
“Before reviewing the on-chain data, the decision to discontinue Community Points was met with disappointment among the Reddit crypto community, with many considering it a rug pull.”
Following the discontinuation of Community Points, the value of the MOON token has plummeted by approximately 84%, from $0.25 to $0.04, as of the time of writing. This massive sell-off and potential rug pull have sparked controversies within the subreddit Cryptocurrency group.
However, the moderators claim that they received advance notice of the program’s termination, which many community members find hard to accept. They suspect that shutting down the points program was a preemptive measure to avoid potential litigation from the U.S. Securities and Exchange Commission (SEC) regulator.
“The administrators of the subreddit Cryptocurrency forum were given only one hour’s notice before the public announcement of the termination of the Community Points program.”
