Plasma's Paul Faecks Responds to Claims of Token Dumping as XPL Crashes

The founder of Plasma, Paul Faecks, firmly dismissed accusations of insider selling after XPL, the project’s native token, saw a drastic decline of over 50% in value over the recent weekend.

On Thursday, Faecks rejected speculation of the team offloading tokens to the market, explaining that both investor and team allocations are secured for three years, with a one-year cliff. “No team members have sold any XPL,” he asserted.

Plasma had introduced its mainnet beta and the Plasma (XPL) token on September 25. This innovative layer-1 blockchain aims to accelerate and reduce costs for stablecoin transactions.

The value of XPL surged to approximately $1.70 on Sunday but has since plummeted to $0.83 by Wednesday, indicating a decline of more than 50%, according to TradingView data.

XPL/Tether perpetual contract chart on Binance. Source: TradingView

Community Concerns and Blockchain Investigations

Following XPL’s significant drop, numerous community members speculated that the team might have been involved in time-weighted average price (TWAP) selling, an algorithmic trading tactic that breaks down large sell orders.

Members from the community engaged in on-chain investigations to track the XPL movements after the drop. An independent analyst, ManaMoon, indicated potential transfers from the Plasma team vault, alleging that the project’s wallet transferred over 600 million XPL tokens to various exchanges shortly before the launch.

“Personally, I believe that someone was TWAP selling an excessive amount of tokens that retail buyers could not withstand,” ManaMoon pointed out.

Source: Melardev

Another community user, crypto_popseye, blamed both the Plasma team and the trading firm Wintermute for the drastic price drop, expressing concerns about the project’s future viability.

Despite these statements, the Plasma team has denied any connections with Wintermute. Faecks reiterated that they have not partnered with Wintermute as a market maker and possess similar information to what is publicly available regarding Wintermute’s stake in XPL.

Community Questions Plasma’s Ecosystem Tokens

Following Faecks’ statements, crypto_popseye raised concerns over the clarity of his messaging regarding token sales. The community member expressed doubt that certain tokens, particularly those linked to the ecosystem and growth, have remained unsold.

“It’s quite apparent they’ve been sold, yet your wording gives the impression they haven’t,” he stated.

Faecks insisted that the team remains focused on building “the future of money” and chose not to provide additional commentary.

Cointelegraph attempted to contact the Plasma team for further insights but did not receive a response prior to publication.

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