- Reddit will sunset its crypto community token program next month.
- Reddit mods with prior knowledge exited positions before token prices dumped.
- Plans are in place to revive the Moon token.
Reddit’s decision to pull the plug on community tokens like MOONs and DONUTs has prompted outrage among users who had invested effort and money in the crypto rewards programs. Some had spent countless hours participating in subreddits specifically to earn these tokens, which have now tanked in value following the announcement of their end.
In a further blow to token holders, it has since emerged that Reddit mods were given advanced notice that the community token program was ending, prompting some to sell their holdings before the public announcement tanked prices, sparking fury at the mods for insider trading.
Reddit Mods in the Spotlight
Twitter account “Pledditor” accused several Reddit moderators of insider trading, having dumped their tokens just before the public announcement. Pledditor went as far as publicly exposing the transaction IDs of the token sales in support of his claims.
Replies to Pledditor’s tweet detailed an outpouring of condemnation, including comments about corruption, lack of ethics, prison, and even calls to the Securities Exchange Commission to investigate the matter further.
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Despite the backlash, most Reddit mods in the r/CryptoCurrency subreddit held their tokens despite having insider knowledge to exit their positions before the price of MOONs tanked. A post from u/DrinkMoreCodeMore detailed the actions of the r/CryptoCurrency mods, showing that more than half had opted not to dump their community tokens before the announcement.
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Reddit’s decision to terminate community tokens has left much uncertainty. Reddit stated that membership perks and token balances held in the Vault wallet would cease after November 8. However, efforts are underway to revive the project.
What Now For Community Tokens?
Although Reddit means to end community tokens, it seems that r/CryptoCurrency mods hold hope of keeping the Moon project going. A tweet from mod “mvea” stated that the mod team aims to take over the project.
The latest news highlights a deadlock in negotiations to transfer contract ownership to the mods. However, the mods are exploring alternative ways to maintain the infrastructure, such as snapshotting balances and airdropping a new token, should Reddit refuse to transfer contract ownership.
On the Flipside
- MOON lost 87% of its value on the announcement of losing Reddit support, leaving token holders nursing severe paper losses.
- Reddit is expected to IPO soon, prompting some to wonder whether the decision to pull community tokens is related.
- Despite being in the minority, the mods who sold their tokens before the announcement have damaged the reputation of the mod team as a whole.
Why This Matters
This event highlights inconsistencies around cryptocurrency oversight. Had stocks been involved, clear insider trading rules and punishments would apply. Yet with crypto, the boundaries remain hazy, allowing for scenarios rife with conflicts of interest. Until that changes, crypto communities will continue confronting issues like this.
Find out more about the decision to sunset Reddit community tokens here:
Here’s Why Reddit Is Scrapping Crypto Tokens Despite Backlash
To learn more about Floki’s staking strategy for a healthy ecosystem, click here:
Floki Plans Sustainable Crypto Staking with Dual-Token System
