Chainlink Team Accused of Dumping $40 Million In LINK Tokens Over Six Weeks

This sell-off caused the token’s valuation to fall by approximately 50 percent from $4.5 in June 2019 to $2.15 in August.

Chainlink Team Sold Millions of LINK Tokens

Shortly after Chainlink posted a recruitment message on July 6, blockchain analysis reveals that the team initiated 17 transactions each containing 700,000 LINK tokens over six weeks. In the recruitment blog post, Chainlink said that it would be hiring more to work on the project and that it would ensure all expansion plans would be accomplished responsibly, by carefully managing the company’s resources, capital, and LINK. With this statement, the Chainlink team was likely hinting at a liquidation move in the short term.

We’re thrilled to announce that in order to meet increased demand for Chainlink, we’re now actively expanding our team. We're excited about adding great people to our team for engineering, product, design, legal, marketing and more https://t.co/ajO72106wb

— Chainlink – Official Channel (@chainlink) July 6, 2019

In 2017, Chainlink raised $32 million in an Initial Coin Offering (ICO) by selling 350 million LINK tokens. According to Chainlink’s white paper, 30 percent of the token supply was in reserve by the company to fund future development efforts. Another 35 percent was supposedly set aside to incentivize node operators that participate in the ecosystem. The remainder was meant to be distributed to investors during the ICO. Out of the billion LINK tokens that were minted, the team, therefore, kept 30 percent or 300 million tokens for themselves.

Chainlink’s Media Blitz on 4chan

LINK’s price gain this year came after 4chan’s /biz/ board took a sudden and keen interest in the project. The board became overwhelmed with discussion and hype surrounding Chainlink and the LINK token. Over the following weeks, the token experienced parabolic growth and grew tenfold to its highest point in June, shortly before its developers sold the first batch of tokens. The cryptocurrency community on Twitter has compared Chainlink’s selloff to that of Ripple Labs, which has reportedly been selling an average of 2.425 Billion XRP tokens every single year since 2014. When the cryptocurrency market witnessed a bearish period in 2018, many coins experienced a decline of 90 percent. XRP’s valuation also fell sharply by over 88 percent relative to its Bitcoin (BTC) pairing. Regardless, according to Ripple Labs’ quarterly reports, the company sold $530 million worth of XRP that year. Do you believe mass sell-offs should be considered a red flag by investors holding a position in the cryptocurrency market? Let us know your thoughts in the comments below. Buy and trade cryptocurrencies like Chainlink with a 100x multiplier on our partner exchange, StormGain.

---

Images are courtesy of Shutterstock, Twitter.