- Toncoin’s market cap saw a $7 billion drop in valuation on May 29.
- The issue stemmed from alleged mistaken inclusions
- Some observers alleged the Toncoin team was complicit in investor manipulation.
Recent weeks have seen the meteoric rise of Toncoin in the market cap rankings. The project overtook Cardano to storm into ninth place in April, even surpassing Dogecoin for the eighth spot briefly last month. This came after Toncoin’s rollout of new ID-verifying palm scanning technology and the associated token giveaway incentives to drive user sign-ups.
Sponsored
The momentum only built from there as Toncoin partnered with HashKey Group for fiat on/off ramping while also scoring a major coup in getting Tether to bring its USDT stablecoin to the TON blockchain. However, on May 29, Toncoin’s market cap valuation plunged by $7 billion, stoking concerns about the project’s future.
Mysterious Drop in Toncoin Valuation
The crypto community was quick to voice their concerns about Toncoin’s sudden and massive $7 billion market cap revaluation on Wednesday. Commenting on the inexplicable drop, YouTuber “P₳ul” stated it was odd that Toncoin’s valuation plummeted so drastically, yet its price remained unchanged.
Market cap is calculated by taking a project’s circulating token supply and multiplying it by the current price. Meaning the market cap fluctuates in line with price movements. However, critics argue that market cap is an arbitrary and potentially misleading metric that does not accurately reflect a project’s true value or market positioning.
Crypto influencer Ton Expert was equally perplexed by Toncoin’s $7 billion valuation nosedive, wondering what could have caused such a massive revaluation while the token’s price saw no significant movement. The apparent disconnect raised suspicions about potential market manipulation.
Market Manipulation Allegations
Amid rumors of market manipulation, Toncoin released a statement on their Telegram channel late Wednesday night. The post stated that CoinMarketCap, CoinGecko, and TonTech data aggregators had revalued Toncoin’s market cap “to align with industry practice as laid out by CoinGecko.”
The message explained that an in-depth review of the TON blockchain showed that locked or reserved tokens were included in the project’s circulating supply, therefore overstating the market cap. The locked and reserved tokens have now been removed.
Toncoin previously reported having a 3.41 billion circulating supply, but that figure has been revised down to 2.41 billion.
Co-founder of the ADA Ghost Fund, Chris O, framed the situation as Toncoin intentionally deceiving investors by overstating their circulating supply numbers. He questioned how many retail investors “got conned” based on the belief that Toncoin was more valuable than it is.
Cardano DApp ₳nalyst echoed Chris O’s sentiment, stating his opinion that Toncoin had manipulated investors “to get more attention and more inflows” by artificially inflating its market cap metrics.
On the Flipside
- Inflating market cap metrics undermines trust and transparency in crypto markets.
- This incident raises questions about regulatory oversight and accountability measures.
- Toncoin has no maximum token supply, meaning the team can “print to infinity” in theory.
Why This Matters
This alleged deception by the Toncoin team strikes at the core integrity of cryptocurrency markets. Such incidents amplify calls for greater regulatory oversight, reinforcing the critics’ stance against cryptocurrency.
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