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Reddit moderators sold tokens shortly before the conclusion of the blockchain initiative.
The widely used social networking site Reddit declared the cessation of its blockchain-based community points initiative on Oct. 17, attributing the decision to scalability challenges. This announcement sparked debate within the crypto community, with numerous individuals labeling it a rug-pull, as the value of the native token across various subreddits plummeted following the news.
Each subreddit featured its own unique native token. For instance, the Moons (MOON) token served as the native cryptocurrency for r/CryptoCurrency, while Bricks (BRICK) was designated for r/FortNiteBR. Users had the ability to utilize these points for badges and exclusive items for their avatars.
Upon the announcement, the moderators of most subreddits participating in the community points program stated they were unaware of the decision. However, this claim is now being scrutinized as recent on-chain data indicates that at least a few moderators holding Moons may have been associated with three wallets that sold millions of tokens shortly before the announcement was made.
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On-chain analysts, including Pledditor, were among the first to highlight the actions of subreddit moderator u/Mcgillby. On-chain data shows that this moderator transferred over 100,000 MOON across two separate transactions on the Arbitrum Nova blockchain, converting it into more than $23,000 in Ether (ETH). The user later removed all previous Reddit posts.
.@Reddit admins informed /r/CryptoCurrency moderators in advance, and three moderators sold $MOON tokens based on insider information. $MOON price dropped -22% minutes before the announcement was made.
Here is a list of Reddit moderators acting on inside information BEFORE the announcement: pic.twitter.com/xAh75hOVEa— Pledditor (@Pledditor) October 18, 2023
In a separate incident, just 17 minutes prior to Reddit’s announcement, moderator u/Rider_of_the_storm reportedly transferred 345,422 MOON, valued at over $69,000 at that time, to an exchange address. The Reddit account involved has since been deactivated. According to Lookonchain, on-chain data revealed that at least three administrators managing the cryptocurrency subreddit liquidated tokens approximately 20 to 30 minutes before the public announcement.
1/ Three @CCMOD_ moderators sold $MOON in advance due to #inside information from @Reddit admins. pic.twitter.com/ucrPkh6siX
— Lookonchain (@lookonchain) October 19, 2023
A statement from the Reddit moderators indicated that they were notified about the discontinuation of the community points program one hour prior, implying that the three moderators may have leveraged this information to sell their token holdings.
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