Key Takeaways:
- GARI token dumped over 80%, sparking fears of rug-pull, insider trading and platform hack
- GARI is the native token of Indian video sharing app Chingari, backed by Bollywood actor Salman Khan
- The price crash took place after a major whale dumped $2 million worth of GARI tokens on KuCoin
YEREVAN (CoinChapter.com) — Indian social crypto token GARI, the native currency of Salman Khan-backed Chingari app, is reclaiming lost steam. The recovery comes after the coin experienced a massive dump that sparked rug-pull rumors.
Late on Monday, the price of GARI abruptly plummeted by over 80% to register a new all-time low of $0.13. The price crash resulted in rumors that someone had hacked the network and was dumping the tokens on the cryptocurrency exchange KuCoin.
However, the team behind the project was quick to deny rumors that hackers had compromised the network. In a reassuring post, it blamed the sudden price crash on “market events”.
“We at GARI network announce that after a thorough evaluation there has been NO hack identified on the tokens’ side & so far this looks like a market event. We assure our community that ALL tokens are safe in the respective reserves,”
the announcement read.
The event also sparked fears among investors that the project was folding permanently. Some drew parallels between the GARI token’s price crash with the recent obliteration of the Terra ecosystem.
Earlier this year, LUNA, the native token of Terra, and the network’s stablecoin Terra USD (UST) dumped, sparking a domino effect. Experts attribute the current crypto winter to the de-pegging of UST.
Salman Khan, one of the most popular and highly-paid Bollywood actors launched the GARI token in October 2021. It currently serves as the reward token on the short video application Chingari.
The platform helps content creators monetize their videos through GARI. It also has a dedicated nonfungible token (NFT) marketplace.
As CoinChapter earlier reported, besides Chingari App, Khan has also partnered with another Indian NFT platform called BollyCoin to release Bollywood digital collectibles.
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Was KuCoin to blame for the GARI price crash?
The developers described the unexpected dump of GARI token’s price as a “black swan” event caused by a $2 million market sell order on KuCoin.
However, as the Chingari team explained, the order suddenly pushed the token price to $0.14 as the market maker didn’t provide enough liquidity to handle it.
“This sudden drop caused cascading liquidations on Kucoin which they started dumping in the open market and drove the price down…The sudden drop in $GARI token price resulted in a domino effect triggering other investors or speculators to follow the suit,”
the team claimed.
The team also verified that there was no insider trading involved in the fiasco.
Meanwhile, traders took a dig at KuCoin for initiating the artificial price dip. Some even claimed the crypto exchange was the big whale that had dumped the $2 million worth of GARI tokens in the market.
However, KuCoin denied charges, claiming it has maintained its neutrality throughout the incident. According to the exchange, the price was temporarily lower on its platform because it is the biggest market that has listed GARI.
Token holders opted to sell on KuCoin because it has the maximum liquidity for GARI.
“The price difference between exchanges existed for a few minutes, but it was soon erased as people made arbitrages between exchanges, buying low at KuCoin and selling high elsewhere,”
Johnny Lyu, chief executive of the crypto exchange said, according to Tech Circle.
Following the dump, the GARI token has shown signs of recovery. It rallied back to reclaim $0.2387 before people began cashing out quick profits. However, it still trades over 82% lower than its all-time high of $1.05 from 18 January, 2022.
