Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
Covenant AI, a prominent developer of the blockchain-based artificial intelligence platform Bittensor, has announced its departure from the project. This announcement triggered a significant sell-off of the native TAO token and allegations of market manipulation.
Related Posts
Sam Dare, the founder of Covenant AI, accused Bittensor and its key figure Jacob Steeves of undermining decentralization and exerting excessive control over the network. According to Dare, Steeves halted token issuance for the company’s subnets, disregarded community decisions regarding moderation, unilaterally withdrew support for the infrastructure, and applied economic pressure through token sell-offs.
“We cannot, in good conscience, continue to operate within a network where the fundamental promise made to our investors—that this infrastructure is decentralized and permissionless—contradicts the actual governance practices of the network,” stated the head of Covenant AI.
Following Dare’s post on social media platform X, the TAO token plummeted by 23% within hours, reaching $254. The price later rebounded slightly to $265.68, resulting in a total daily decline of 17.7%. Prior to this, the token had been trading above $330. The market capitalization of TAO decreased by nearly $900 million in a short span, with leveraged positions exceeding $9 million being liquidated.
The post from the founder of Covenant AI attracted comments accusing the company of intentionally withdrawing funds following a pump of the token’s price (rug pull) and engaging in speculation. One critic claimed that Covenant AI may have sold approximately 37,000 TAO for $10 million before the cryptocurrency’s decline.
Previously, another cryptocurrency firm, Aave, experienced the departure of three key partners, including the leading risk manager, due to disagreements over platform governance.
