CoinMarketCap (CMC) has been accused by two crypto projects of conducting promotional airdrops that were allegedly manipulated to benefit a small group of exploiters. The projects, SaTT and TokenBot, claim that the tokens meant to be distributed to thousands of wallets ended up funneling to just a handful of wallets, leading to a significant drop in token price and financial losses for the projects.
SaTT alleged that an airdrop conducted by CMC for their SATT token in December 2022 saw 84% of the airdropped tokens ending up in just 21 wallets. The project had paid CMC to distribute tokens to 25,000 winning wallets, with each receiving 4,000 SATT tokens. However, shortly after the airdrop, the tokens were automatically transferred to 21 wallet addresses, which then sold off their holdings, resulting in a 70% price drop for SATT.
TokenBot co-founder Shaun Newsum shared a similar experience, stating that a CMC-led airdrop of their TKB token also resulted in a large percentage of tokens being funneled to a single wallet. Newsum claimed that around $20,000 was lost in the incident, and the project had to allocate more liquidity from its treasury. Despite this, Newsum received an apology from CMC and was informed that an investigation was underway to address the issue.
SaTT claims to have identified similar fraudulent activities in 18 other token or NFT airdrops conducted by CMC since July 2022, amounting to $6.6 million in total. The projects affected include TopGoal, OwlDAO, and AgeofGods. SaTT theorized that the fraud could have been caused by hackers injecting fake accounts into the airdrops on CMC’s website or by an inside job.
In response to these allegations, a CMC spokesperson stated that at least four of the identified projects have not yet distributed rewards, making it impossible for them to have faced malicious activity. The spokesperson also acknowledged that bot participation is a common issue in airdrops across the industry and that CMC is continuously working to improve systems and services to address this issue. Several measures, such as CAPTCHA challenges and email verification requirements, have been implemented to deter bot participation.
Despite the claims made by SaTT and TokenBot, CMC maintains that it is taking the issue of bot participation in airdrops seriously and is working to resolve each case individually. The platform has also shared that it is developing additional features, such as two-factor authentication integration, to further combat bot activity. TopGoal, OwlDAO, and AgeofGods were contacted for comment but did not respond at the time of publication.
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