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Plasma’s native token XPL crashed more than 50% within days of its September 25 launch, falling from $1.70 to $0.83 as community members accused insiders of dumping tokens. Founder Paul Faecks denied the allegations, but onchain investigators claim to have traced over 600 million XPL tokens moving to exchanges.
The project, which officially launched its mainnet beta and the XPL token on September 25, was designed to offer cheaper and faster stablecoin payments. Its initial market excitement quickly shifted into concern as the price collapse triggered community suspicion of an orchestrated XPL token dump.
The steep decline sparked a wave of independent onchain investigations, with several community members claiming to have tracked unusual token movements.
One anonymous sleuth, ManaMoon, pointed to large transfers from the Plasma team vault, noting that more than 600 million XPL tokens had been sent to exchanges in the days leading up to the launch.
“Personally, I believe that someone was TWAP selling an excessive amount of tokens that retail buyers could not withstand,” ManaMoon wrote, referring to the time-weighted average price strategy often used to gradually sell large positions.
Another community member, using the handle crypto_popseye, directly accused Plasma and the algorithmic trading firm Wintermute of contributing to the market crash.
“Plasma $xpl pretty much destroyed their chart and momentum, and I hope their project fails,” he wrote.
In response to speculation linking Wintermute to the XPL token dump, Faecks firmly denied any formal association.
“We have not engaged Wintermute as a market maker and have never contracted with Wintermute for any of their services,” he said. “We have the same information as the public on Wintermute’s ownership of XPL.”
Despite this clarification, skepticism remains high within the community. Several traders argue that the team’s explanations rule out insider selling but fail to address whether other allocations, such as “ecosystem and growth” tokens, were sold into the market.
“Pretty clear they have been sold, but you are wording your tweet to make it seem like they haven’t been sold,” crypto_popseye countered in response to Faecks’ statement.
For many investors, the unresolved questions highlight the importance of transparency in early-stage crypto projects, particularly during token launches. While Faecks reiterated that the team is “laser-focused on building the future of money,” he declined to comment further.
The lack of clarity has fueled speculation that the XPL token dump could have longer-term implications for Plasma’s credibility. With no official confirmation about the movements flagged in onchain data, community trust appears to be wavering.
As scrutiny continues, the XPL token dump has become a focal point for debates on insider activity, algorithmic trading, and transparency in token launches—issues that remain critical for both investors and the broader crypto ecosystem.
