The blockchain community in the US
The blockchain community in the US was rocked by allegations made by the renowned investigator, ZachXBT, against Gotbit, a crypto market maker. The accusations stem from a leaked report which suggests Gotbit indulged in potentially unethical trading behaviors.
ZachXBT, who is known for his deep dives into the inner workings of the crypto industry, shared a screenshot of the leaked report on Sunday, Sept. 24. The leak paints a picture of Gotbit’s methodology which, on the surface, appears dubious. The market maker allegedly attempts to pump a token's price significantly, instigating a 'fear of missing out' or FOMO effect among investors, to then capitalize on the subsequent buying frenzy.
The tweet from ZachXBT read: “I would be weary of any projects you see working with the market maker @gotbit_io as a leaked report shows highly questionable services offered. Gotbit claims: During the first minutes in the price discovery stage, we are going to push the price up to 10x to create FOMO and…”
While these allegations are grave, it's worth noting that the authenticity of the leaked report remains unconfirmed. As of our last update, Gotbit has not issued any public statements concerning the allegations or the supposed leak. However, if proven true, these actions could have serious implications for Gotbit and potentially for the broader crypto industry.
Gotbit's past has its own controversies. In a 2019 interview, co-founder Alex Andryunin confessed that aspects of their business were “not entirely ethical”. Following these revelations, there was news suggesting Gotbit would phase out its market-making business, attributing the decision to the challenges brought on by stringent customer identification processes.
Nevertheless, the market maker's website today still flaunts connections with several big players in the crypto space. The “our friends” section of the website lists numerous prominent crypto exchanges and venture firms such as Binance, OKX, Crypto.com, a16z, Gate.io, Bybit, Enjin, among others. It remains uncertain whether these firms maintain any active association or collaboration with Gotbit.
In response to the leak and ensuing allegations, members of the crypto community have expressed concern. “If these reports about Gotbit are accurate, it could undermine investor trust in the crypto space, which is already under scrutiny for its lack of regulation,” commented Prof. Ellen Malloy, a financial expert at Princeton University.
Many within the blockchain community in the US believe that if such practices are widespread, they can seriously jeopardize the reputation and growth of the industry. As Thomas Geller, a long-time crypto enthusiast and trader, put it, "It's acts like these that make it hard for the everyday person to trust cryptocurrency. While there are many legitimate projects and practices in the industry, even a single bad actor can cast a shadow."
Following the accusations, several online crypto forums and Reddit threads were buzzing with discussions around Gotbit’s operations. Most users were appalled by the revelations, but some argued that such practices were an open secret in the volatile world of crypto trading.
It remains to be seen how these allegations will play out and what consequences they will bring for Gotbit and the wider crypto industry. Regulatory bodies might find this a prime opportunity to step in, potentially further tightening the rules around crypto trading.
In the meantime, investors are urged to remain cautious and conduct thorough due diligence before investing in any crypto projects. As the adage goes, "If it sounds too good to be true, it probably is." Given the volatile nature of cryptocurrencies and the newness of the market, it's always advisable to tread with caution.
This is just one of the many stories emanating from the dynamic world of blockchain and cryptocurrency. As with any financial venture, investors and enthusiasts are reminded to remain vigilant and informed. The space is fast-paced and ever-evolving, but as this story suggests, not every revelation is a positive one for the industry.
