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Chainlink, the 20th biggest coin by market cap, is most probably your textbook example of a pump-and-dump scam. This revelation has been made Blockchain analytics firm AnChain.AI.
A coordinated pump-and-dump scheme
As explained by U.Today, “pump-and-dump” is the practice of artificially inflating the asset’s price to hook the investors’ interest. Obviously, only pump organizers and the inner circle are able to profit off such schemes after dumping their bags on the herd of uninitiated buyers.
After analyzing the trading of the LINK token from Apr. 1 till July 26, AnChain.AI has concluded that there is a number of addresses that routinely trigger rounds of pump-and-dumps. One can allegedly predict when another price move takes place by keeping tabs on these particular wallets.
On June 29, LINK reached its current ATH of $4.36 on the heels of its Coinbase listing. However, it turns out that a small number of traders were responsible for this enormous growth.
The market cap of Chainlink has dwarfed by more than $600 mln since June. At the time of writing, it is trading at $1.78.
The Chainlink team under pressure
According to SmartContract CEO Sergey Nazarov, there is nothing that they can do about these manipulations given that the market for their token exists apart from Chainlink. Moreover, the company vehemently denies its involvement in these pump-and-dump schemes. U.Today has reached the Chainlink team and Nazarov himself for comment.
Chainlink developers have also been accused of dumping batches of 700,000 LINK on the open market. This selling spree, which is supposed to ramp up the company’s operations, conveniently came after the token hit its ATH.