Key Takeaways:
- Update – three /r/CryptoCurrency subreddit moderators sold before the ‘time of death.’
- Reddit allegedly rugged RCP token MOON holders, sending the token tumbling 85%.
- Community Points program did not justify expenses, said a Reddit official.
YEREVAN (CoinChapter.com) – On Oct 18, social media platform Reddit’s alleged rug pull scandal took a new turn – a crypto analyst claimed that several subreddit moderators knew about the decision and sold their Reddit Community Points (RCP) tokens – MOONs, just before the 85% crash.
Reddit Admins Tipped Off 3 Moderators
Reddit admins allegedly tipped off three moderators of the /r/CryptoCurrency subreddit, /u/Mcgillby, /u/rider_of_the_storm, and /u/IHaventEvenGotADog, before shutting down the RCP program. The moderator then sold their holdings ahead of the official announcement from Reddit at 1:02:25 PM EST on Oct 17.
@Pledditor, a crypto analyst with an extensive following, provided transaction hashes as proof of the sales. The analyst also stated that the MOON token price fell 22% BEFORE the announcement, backing the assumption that inside trading occurred.
Several moderators sold immediately after the announcement, including /u/TNGSystems and /u/MrMoustacheMan.
Two snapshots of their conversations also circulated on Reddit and X (Twitter). Moderator /u/TNGSystems claimed they had a call with Reddit admins, who asserted that the RCP program was not generating revenue for the social media platform.
Another moderator, u/CryptoMods, assured that “your MOONs are still yours and are not going to be burned.” Only those MOONs lost over 85% of their value within minutes. The moderator also hinted at a possible Airdrop, saying they plan to “continue to work with MOON independently.”
It’s time to overview what happened between Reddit and the MOON token.
Reddit called ‘time of death’ on RCP.
In detail, Reddit introduced its Community Points program in 2020. It was intended to incentivize users to participate in selected subreddits. Users could earn Moons by creating posts or comments that received upvotes from other users. The more upvotes a post or comment receives, the more MOONs the user earns.
A Redditor described the initial public reaction as “speculative.”
At first, converting your funny internet points to actual money was an incredibly convoluted, multi-step process that involved multiple sketchy websites and some weird plugins and generally was a pain in the *ss to bother with for anyone but the most dedicated crypto bros.
they commented.
MOON token fell 85%
However, MOON listings from the MEXC crypto exchange in August 2022 and the Kraken exchange a year later propelled the coin to an all-time high of $0.6 in July 2023. Fast forward to Oct 17, Reddit announced it closed RCP for good. MOON dropped to $0.03 within minutes.
Tim Rathschmidt, Reddit’s director of consumer and product communications, partially blamed the move on regulators.
Though we saw some future opportunities for Community Points, the resourcing needed was […] too high to justify. The regulatory environment has since added to that effort. Though the moderators and communities […] have been incredible partners — as it’s evolved, the product is no longer set up to scale.
he asserted.
The community accused Reddit of rug-pulling them and cutting their life savings.
