"Venice AI Token Plummets 63% Amid Launch Week Sales Controversy"

Venice AI Token Drops 63% Following Launch Week Sales

Venice, a newly launched artificial intelligence startup in the cryptocurrency space, has faced controversy following allegations of early token sales worth $10.2 million. The project, founded by bitcoin entrepreneur Erik Voorhees, launched its Venice token (VVV) last Monday, but questions quickly arose about early trading patterns.

Onchain analyst Amir Ormu at Castle Labs published findings showing that sixteen wallets connected to a Venice team multi-signature wallet received tokens four days before the public launch. These wallets contained 23% of the total token supply, according to Ormu’s analysis.

The price movement of the Venice token tells a striking story. After reaching a peak of $19.38 in the hours following its launch, the token’s value dropped dramatically. By February 2nd, the price had fallen to $2.44, representing a 63% decrease in less than two weeks, according to data from Coin Market Cap.

Venice markets itself as a privacy-focused AI chatbot powered by open-source large language models, including Llama and Deepseek. The project launched on the Base network, aiming to provide infrastructure for crypto AI agents, which have gained popularity on the platform.

The company’s official tokenomics allocated 35% of the 100 million total tokens to the company itself. Of this amount, 10% was designated for the team, with 25% of that portion available immediately and the rest scheduled for distribution over two years.

Erik Voorhees responded to the allegations by pointing to the project’s transparency. “The announcement blog stated terms of the token clearly,” he said. “Approximately 2.5% of supply could be sold…A fraction of that 2.5% was actually sold. This was all conveyed upfront.”

Ormu’s investigation revealed additional details about token distribution. According to his findings, market makers Wintermute and Kbit received 5.5% of the total VVV supply. While this aligns with Venice’s stated plan to allocate 10% to market makers, Ormu raised concerns about Wintermute’s trading behavior.

The swift listing of VVV on Coinbase has drawn attention from market observers. This development came during a period when Coinbase