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"Venice AI's VVV Token Plunges 50% Amid Insider Trading Allegations"

Coin WorldWednesday, Jan 29, 2025 3:37 am ET

1min read

Venice AI's VVV token experienced a significant drop of 50% in value following allegations of insider trading, which dampened early enthusiasm for the newly launched AI platform.

Venice AI debuted on Monday as an AI platform on the Base network, offering users access to China's DeepSeek with an added layer of privacy. The token's market capitalization surged to $1 billion from an initial $20 million, driven by its appeal of providing private, uncensored AI inference access without per-request fees. Its listing on Coinbase on the first day of launch may have also contributed to its rapid ascent.

However, sentiment turned sour on Tuesday night when reports emerged of insiders making millions of dollars from the launch. Two contributors of launch partner Aerodrome Finance purchased a substantial number of tokens shortly after it went live on the platform, before any public announcements. The position reportedly grew from $50,000 to $1 million in less than an hour.

Aerodrome Finance suspended the two contributors following community backlash. The team stated that the timing of a small percentage of the trading activity around the VVV launch was flagged by internal monitoring within 30 minutes, triggering an internal investigation. The investigation led to the suspension of the two contributors within three hours of the launch, with the team vowing to take further appropriate action if necessary.

The allegations of insider trading have raised concerns about the integrity of the launch and the platform's commitment to fair and transparent practices. As the investigation continues, the future of Venice AI's VVV token and its potential impact on the broader AI and crypto markets remain uncertain.

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