On Monday, the GARI token of Solana blockchain-based social network application Chingari dropped 87%, fueling speculation that hacks or misconduct had taken place.
Developers said that the decrease was most likely due to a single sell order of more than $2 million by a large GARI holder, which caused the price to drop. They also denied any allegations of an exploit or hack.
The sell order for $2 million and the lack of market liquidity triggered a chain reaction of liquidations on KuCoin, which sent prices from 71 cents to 3 cents.“The $GARI token was largely damaged on KuCoin,” the developers noted. “The reason identified is the $2 million market sell order at 16:10 UTC on 4th July 2022, pushed the token price to $0.14 suddenly as the market maker didn’t provide enough liquidity to handle it.”
After hours, prices plummeted to 10 cents.
The developers dismissed any wrongdoing. “We can confirm that there was no insider trading,” they added, directing readers to a blockchain wallet where the team’s allotted tokens are stored.
Chingari has had more than 50 million downloads on Google Play worldwide, with its greatest concentration in India. The company has already raised $19 million in a seed funding round, including RepublicCrypto, Solana Capital, and crypto exchange Kraken.