Arthur Cheong, founder of Defiance Capital, has raised significant concerns over alleged market manipulation within the cryptocurrency industry by various projects and market makers. In doing so, he accused these entities of artificially sustaining token prices, while centralized exchanges (CEXs) remain notably unresponsive.
Cheong Warns Market Is Becoming ‘Uninvestable’
In a post on April 14, Cheong emphasized that the liquid crypto market is beset by a “complete black box” system, where the involved parties collaborate to engineer token valuations. “You don’t know whether the price is a result of organic demand and supply,” he wrote, “or simply due to projects and market makers colluding to fix the price to achieve other objectives.”
“You don’t know whether the price is a result of organic demand and supply,” he wrote, “or simply due to projects and market makers colluding to fix the price to achieve other objectives.”
Cheong also criticized CEXs for their apparent oversight, suggesting that they are purposefully ignoring these manipulative practices, which underpin a damaging impact on market integrity. The altcoin market is increasingly resembling a “lemon’s market,” according to Cheong, where reduced trust makes it difficult for investors to identify quality assets.
He pointed out that token generation events (TGEs) slated for 2025 are showing signs of poor pricing, with numerous coins plummeting between 70% and 90% within months of their listings, resulting in substantial losses for buyers.
The Chief Investment Officer of Defiance Capital concluded that unless influential players within the crypto space take urgent actions to rectify these issues, large segments of the market will continue to be unwelcoming for serious investors.
MANTRA Crash Sparks Manipulation Fears
Cheong’s remarks come on the heels of a dramatic collapse of the MANTRA’s native token, OM, on April 13, which saw its market value decrease by 90% within hours. John Patrick Mullin, a co-founder of the protocol, claimed that forced liquidations enforced by CEXs were to blame for this downfall.
However, blockchain analytics indicated unusual activities in the days leading to the crash. Lookonchain reported that 17 wallets transferred 43.6 million OM tokens, roughly 4.5% of the total circulating supply, to exchanges starting on April 7, with some wallets tied to Laser Digital, a recognized investor in MANTRA—sparking suspicions of insider trading.
In addition, Spot On Chain revealed that substantial OM holders had moved 14.27 million tokens to OKX just three days prior to the downturn. Intriguingly, they had previously acquired over 84 million OM tokens for $564.7 million in March, amplifying concerns of a planned sell-off.
This scenario mirrors earlier controversies, such as the scrutiny faced by the Libra token. Following a public endorsement from Argentinian President Javier Milei, the coin’s market cap had skyrocketed to $4 billion before experiencing a catastrophic fall of over 90%, resulting in significant investor losses. The country’s Chamber of Deputies has since approved an investigation to probe into Milei’s role in this meme coin’s promotional collapse.
In light of the growing concerns regarding market manipulation, it is imperative to keep a discerning eye on the evolving crypto landscape for the sake of safeguarding investor interests.
