Two cryptocurrency projects have alleged fraud over a promotional airdrop conducted by CoinMarketCap (CMC) on their behalf.
These promotional airdrops — Designed to be distributed to thousands of wallets To raise awareness of crypto projects — ending with tokens reaching only a handful of wallets, hinting at possible manipulation of the system.
Dropping SATT tokens
Blockchain advertising solution SaTT told Cointelegraph that the promotional airdrop it paid to CMC in December 2022 ended with 84% of airdropped tokens going to just 21 wallets.
Under this promotion, 25,000 winning wallets would each receive 4,000 SATT (valued at $6.30 at the time). according to to CoinGecko data.
However, SaTT found that immediately after the airdrop distribution, 20,953 wallets “automatically transferred their tokens to 21 wallet addresses” and sold their token holdings a few days later, giving 21 wallet holders about $142,000. claimed to be profitable.
The sale caused the price of SATT to plummet by 70% between the end of the airdrop on December 1st and the sale of the token by Wallet on December 10th.
TokenBot token drop
TokenBot co-founder Shaun Newsum told Cointelegraph about a similar experience the company had led by CMC. air drop of TKB token on December 9th
Newsum said CMC had provided 30,000 airdrop winners, but chose to “stagger” the airdrops “just in case something happens.”
TokenBot initially sent tokens to a batch of 4,000 winners, but ended up with around 3,300 Send funds to one walletsaid Newsom.
Newsum said about $20,000 was lost by TokenBot in the incident and the project needs to deploy more liquidity from its finances.
“Obviously, someone figured out how to gamify CMC,” he added. “If we had sent it in bulk, the whole airdrop would have been a complete disaster.”
Newsum said it received an apology from CMC saying it was investigating the airdrop and would return the latest list of winners for the project.
In its investigation, SaTT claims that: Found another 18 tokens or non-fungible token (NFT) airdrops Conducted by CMC since July 2022, it is also said to have been “infected with fraud” on a scale of $6.6 million.
This includes airdrops for projects such as TopGoal, OwlDAO and AgeOfGods.
SaTT theorized two possibilities as to how the “fraud” occurred.
“A group of hackers injected a large number of fake accounts? [into the airdrop on CMC’s website] […] Or it was actually an inside job.
CoinMarketCap responds
Speaking to Cointelegraph, a CMC spokesperson cited some of these allegations, claiming that at least four projects identified by SaTT have yet to distribute rewards, citing “malicious” activity. Faced means “impossible”.
The spokesperson also said three projects, including SaTT, AgeOfGods, and TokenBot, have spoken to the CMC team about their concerns, but have not received any communication from other projects about the alleged issues.
However, a spokesperson acknowledged that “bots are a problem that affects almost every industry.”
“The industry has faced this issue in airdrop programs for some time, but the reality is that no industry has completely solved the bot problem.”
“We are continuously working to improve our systems and services to limit this issue and will work closely with these projects to find solutions and help resolve current issues.” added the spokesperson.
Related: Crypto Recovery Needs A More Aggressive Solution To Fraud
they added it Bot participation claims That airdrop was taken “very seriously” and “we work to resolve each case on an individual basis”.
We also shared some of the features CMC employs to deter bots from joining, such as CAPTCHA challenges and participant email verification requirements. The company is also developing a two-factor authentication integration.
Cointelegraph reached out to TopGoal and OwlDAO for comment, but did not receive a response by the time of publication. AgeOfGods could not be reached for comment.
