Overview

Coinbase has found itself at the center of controversy after it was revealed that three crypto wallets purchased the ‘Base is for Everyone’ tokens prior to the official launch announcement.

Key Points

• Allegations: Three wallets procured tokens ahead of the announcement made on X, reaping substantial profits.
• Coinbase’s Role: Jesse, the creator of Base, approved the token’s introduction.

Token Launch Details

On Wednesday at around 19:30 UTC, Base disclosed that its token was launched via Zora, a decentralized social network that converts content into tradeable coins. Soon after, the token’s value skyrocketed to a market cap exceeding $15 million.

Blockchain analysis from Lookonchain revealed that these wallets profited around $666,000 from their pre-announcement purchases. One wallet invested 1.5 ether to acquire 256.39 million units, selling them later for a profit of $168,000 within an hour. Other wallets also made significant gains.

Market Fluctuations

Following the announcement, the token’s market cap plummeted to below $2 million due to another coin announcement by Base, which drained liquidity from the original token, leading to substantial losses for some investors. Despite this setback, the market cap rebounded, surpassing $18 at the time of reporting.

Coinbase clarified that the ‘Base is for Everyone’ token is not their official cryptocurrency and that they did not directly partake in its sale. They stated, “To be clear, Base will never sell these tokens, and these are not official network tokens for Base, Coinbase, or any other related product.”

Conclusion

Such rapid bursts in value for minor tokens often lead to severe wealth disparity, benefiting a select few while many investors face losses, ultimately contributing to liquidity issues within the broader digital asset ecosystem.