As ESPORTS, a token for the game and esports ecosystem issued by YooldoGames, made up of a domestic operating team, plunged more than 90% in a day, questions are being raised over whether an insider was involved in the price crash.
According to CoinMarketCap, a virtual asset market platform, on the 27th, the price of ESPORTS fell more than 90% from $0.7 to $0.05 as of 9:30 a.m. That is because 197.8 million ESPORTS, equal to 43% of total circulating supply, were sold over four hours from 6 p.m. on the 25th. The ESPORTS sold were exchanged for 20,401 BNB coins. That is about $13.65 million (about 20.5 billion won).
Some in the industry also suspect an insider "rug pull" (investment withdrawal scam). A rug pull refers to project operators or early holders selling a large amount of virtual assets, withdrawing the funds, and abandoning the project.
Virtual asset analyst ZachXBT said, "The ESPORTS token plunged 93% in a single day. Is that just luck, or is it an insider?"
"Ash Crypto," who has 2.18 million followers on X, said, "There are allegations that the project team controlled most of the ESPORTS circulating supply." The account added, "60 million tokens were quietly unlocked from a team-managed multisig (multi-signature) wallet, and a connected wallet dumped an amount equal to 43% of the total circulation onto the market," and "the massive sell-off exhausted all buy-side liquidity, leaving only individual investors holding tokens that have effectively lost their value."
ESPORTS issuer YooldoGames said in connection with the plunge, "We are aware of the volatility in the ESPORTS token. We are actively investigating the cause of the drop and the details, and will make an announcement once the investigation is complete."
YooldoGames is a play-to-earn (P2E) blockchain game platform developed by domestic game company Catze Labs. Catze Labs, led by CEO Shin Do-heon, drew attention in the blockchain industry after winning first place in a game development competition hosted in 2023 by blockchain companies including Coinbase, BNB Chain, and Klaytn.
Catze Labs said it "has no relation to the issuance, operation, distribution, sale, or price-related activities of Yooldo and ESPORTS tokens and is a separate development company from Yooldo."