Insider traders netted about $20 million from the launch of cryptocurrency FOCAI on the Solana blockchain. According to LookonChain, insiders associated with the token acted on backhand information, profiting $20 million from the launch.
According to the research carried out by LookonChain, 15 wallets, suspected to belong to insiders, used more than 65 SOL to purchase 605 million FOCAI tokens. The SOL at the time was worth about $14,000, with the total purchased tokens about 60% of the entire supply.
The transactions were carried out on Raydium, a decentralized exchange on Solana. The suspected Insider wallets later sold the tokens for 94,175 SOL, which amounted to about $20.5 million. The sales saw a profit of about 94,108 SOL, worth $20.48 million.
LookonChain investigation implicates FOCAI project team
In a follow-up tweet, LookonChain corrected the initial post, noting that the team in charge of the FOCAI project acquired some tokens using other wallets. The follow-up tweet further implicated the team, putting them at the heart of the whole operation.
The investigation has several ripples across the crypto community, with users expressing shock at the profits. Users are also displeased with the amount of money the team behind the projects made using privileged information.
According to CoinGecko, the token did well after the launch, moving rapidly into the sky. The project reached a $50 million market capitalization in about 11 minutes, while trading volume also rose, hitting $48 million in 47 minutes. After the Insider activity, the price of the token dropped to $0.3, pushing the market cap to $32 million.
Analyst points out FOCAI’s red flags
A crypto analyst on X @olegmetaverse flagged the crypto as a potential scam, warning the crypto community. The analyst noted that the AI coin had several red flags that showed misrepresentation and a lack of technical integrity.
In his analysis, he revealed that the token was a clone of an original Eliza, with limited original contributors. He highlighted the use of trendy words in its marketing materials, noting that it lacked any substantial explanation to support the claims.
Another major red flag was the incomplete explanatory documents across several languages. The analyst said it was a ploy to mislead investors, noting a lack of transparency. They also claimed that despite their claims of blockchain integration, the project’s codebase showed it lacked those features.