Plasma Founder Refutes Claims of Team Selling Following 50% Drop in XPL Price

Plasma founder Paul Faecks has refuted claims of insider selling after the project’s native token, XPL, plummeted by over 50% over the weekend.

On Thursday, Faecks dismissed rumors that the team sold tokens on the market, emphasizing that both investor and team allocations are locked for three years with a one-year cliff. “No team members have sold any XPL,” he stated.

XPL surged to nearly $1.70 on Sunday but fell steadily to $0.83 by Wednesday, losing more than 50% of its value, according to TradingView data.

The sharp decline led many community members to suspect that the team might have used a time-weighted average price (TWAP) selling strategy. This approach involves dividing a large sell order into smaller, equally sized orders, executed at regular intervals.

Community concerns and onchain investigations

Following the price drop, community members quickly turned to onchain analysis to track the XPL flow.

Independent investigator ManaMoon highlighted movements from the Plasma team vault. They claimed that the wallet transferred over 600 million XPL tokens to exchanges in the days before the launch.

“I believe someone was TWAP selling a significant amount of tokens that retail buyers couldn’t absorb,” ManaMoon commented.

A community member known as crypto_popseye blamed both the team and the algorithmic trading firm Wintermute for the price crash. “Plasma $xpl has significantly hurt its chart and momentum, and I hope their project fails,” they remarked.

In response to the community’s concerns, the Plasma team denied any connection with Wintermute, stating they possess the same information as the public.

“We have not used Wintermute as a market maker and have never contracted them for any services,” Faecks clarified. “We have the same information as the public regarding Wintermute’s ownership of XPL.”

Related: Aster reimburses users after XPL perpetual glitch spikes price to $4

Community probes ecosystem and growth tokens

After Faecks’ statement, crypto_popseye questioned the founder’s wording, suggesting that while team sales were ruled out, the status of other token categories, such as “ecosystem and growth” tokens, remained vague.

“It seems clear they have been sold, but your wording makes it look like they haven’t,” the user argued.

In his response, Faecks asserted that their team is “laser-focused on building the future of money” and declined to comment further.

Cointelegraph reached out to the Plasma team for additional comments but did not receive a reply by the time of publication.