The large holder's sale of tokens caused prices to drop.
A large holder sold their tokens, causing prices to drop.
On Monday night, the rumors of exploits or wrongdoings in Chingari (GARI)’s community started after the price of its tokens fell by 87%.
In a statement on Wednesday, developers said that the drop in GARI prices was likely caused by a single order of over $2 million from a large GARI holder, which affected market prices. They also denied reports that there was an exploit or hack.
"The $GARI token was affected greatly by KuCoin," the developers said. "The reason for this is that a market sell order worth $2 million was placed at 16:10 UTC on July 4th 2022, causing the token price to plummet to $0.14 as the market maker wasn't able to provide enough liquidity."
Developers added the $2 million sell order and lack of liquidity, which caused cascading liquidations on KuCoin, led to a drop in price from 71 cents to as low as 3 cents. In the hours that followed, prices bounced back to around 10 cents.
The team denied any wrongdoing. Developers said, "We confirm that there was no insider trading," and linked to a blockchain wallet that holds their allocated tokens.
Chingari has over 50 million worldwide downloads on Google Play, with its largest user base in India. The application has previously raised $19 million in a seed round with investors such as RepublicCrypto, Solana Capital and crypto exchange Kraken.