The Matic blockchain platform today has attracted a lot of attention from the community when the MATIC token dropped by about 70.75% in just 3 hours. Although Matic Network has not yet released a statement about the incident, many comments on Twitter have speculated that there were signs of bad play.
Matic FUD
Shortly after the flash crash, Matic Sandeep Nailwal’s co-founder and CEO dismissed FUDs. “It is very clear that we are not behind this. We will post an ever more detailed and powerful analysis of this apparent manipulation,” Nailwal tweeted.
Just woke up to this nightmare due to a distress call by someone
It will be clear very shortly that we are not behind this, as some FUD accounts are trying to insinuate
We will post a detailed analysis and we will come out stronger than ever from this evident manipulation— Sandeep Nailwal-Matic Network (@sandeepnailwal) December 10, 2019
Looking at the transactions made by The Matic Network Foundation, Samuel JJ Gosling, founder of the crypto valuation platform Valalit, tweeted that the Matic Network Foundation has transferred nearly 1.5 billion MATIC (worth nearly 70 million dollars at ATH) in the last fifty days. All of these are sent for liquidation to the Binance exchange.
However, it seems that the 1.5 billion tokens cited may not be accurate. ViewBase data shows that the amount transferred is nearly $ 218 million in the past 30 days. Meanwhile, a builder at EthHub stated that “in the past 50 days, they have transferred 290,000,000 MATIC to Binance NOT 1,495,322,715”.
It’s disgraceful that people take random tweets as gospel in an attempt to destroy a project (@maticnetwork in this case).
The actual truth is, in the past 50 days, they have moved ~290,000,000 MATIC to Binance NOT 1,495,322,715. https://t.co/f2Nt3zJZyi
— eric.eth (@econoar) December 10, 2019
Nailwal further stated that all accurate data will be posted later and “the money transferred is from a smart contract account locked in the fund’s wallet”. He also emphasized that the money transferred to Binance or any other wallet is linked to their token issuance.
Reaction from Binance
Binance CEO Changpeng Zhao (CZ) has given a temporary relief on what happened to Matic. CZ said the exchange is still investigating the data, and Binance is very clear that the Matic team does not have any action on the sudden decline in the value of the token.
Our team is still investigating the data, but it’s already clear that the MATIC team has nothing to do with it. A number of big traders panicked, causing a cycle. Going to be a tough call on how much an exchange should interfere with people’s trading. https://t.co/wOVF6tEBkQ
— CZ Binance (@cz_binance) December 10, 2019
While With Nailwal calling “this is a concerted effort to discredit (their) reputation,” perhaps more sophisticated analysis will reveal what has really happened in the past three hours.
Community’s Reaction
What a terrible day for those who bought Matic because of FOMO, after the token became one of Binance’s IEO projects. What makes the community wonder is why a project does this purposefully?
In the context of the Matic flash crash, a suspicious whale move was recorded and reported by Whale Alert. Accordingly, 200M USDT was transferred from Binance to the Tether Treasury. Many people think that this is a move to dump profits of Matic.
$Matic dump profit ?
— CryptoD₿S (@DbsCrypto) December 10, 2019
And some traders thought that Matic is likely a scam:
or Scam-matic
— mixxsh (@mishxx88) December 10, 2019
Famous Trader Alex Krüger also commented on this chaos that this is a prime example of the thin line between “dreams and nightmares. MATIC increased by 180% in two weeks before collapsing 70% in an hour”.
Crypto. The stuff of dreams and nightmares. $MATIC was up 180% in two weeks before crashing 70% in an hour. pic.twitter.com/zo9LzP80L8
— Alex Krüger (@krugermacro) December 10, 2019
The community is also wondering about how to choose some low liquidity & cap coins in Binance’s margin trading:
Maybe good to NOT use margin trading on low liquidity & cap coins.
— Crypto Michaël (@CryptoMichNL) December 10, 2019
But, not everyone is pessimistic about this situation. Trader Michael Cerisano is quite excited because this is an opportunity to buy Matic for less than 200 sts.
Never bought matic until tonight under 200 sats, opportunity everywhere
— Michael Cerisano (@ceribeasto) December 10, 2019
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