Cryptoprojects accused CoinMarketCap of airdrop scams

CoinMarketCap chose winners and sent them tokens. As a result, they only made it to a few wallets and were sold, collapsing prices for those projects. Crypto-Upvotes expert review.

Cryptoprojects claim that advertising campaigns from CoinMarketCap (CMC) were scamming and caused their token prices to fall. The developers accuse CMC of foul play in promoting their airdrops. And they claim that cryptocurrencies ended up in only a few wallets, indicating that the system could be manipulated.

CoinMarketCar is one of the largest aggregators of cryptocurrency market data, launched in 2013. This service collects information from most trading venues, tracking key metrics of tokens and crypto exchanges. In 2020, Binance bought this platform.

Blockchain project SaTT reported that a promotional campaign on SMS was paid for in December 2022. It ended with 84% of the issued tokens reaching just 21 wallets. As part of this promotion, 25,000 winning addresses were to receive 4,000 SATT each.

SaTT said that shortly after Airdrop, 20,900 addresses “automatically transferred tokens to 21 wallets.” Which sold those tokens a few days later, generating about $142k. As a result of this sale, the SATT price fell 70% in 10 days – from the end of Airdrop on December 1 until those wallets sold their tokens on December 10.

Other projects also faced a problem with Airdrops on CoinMarketCap

The TokenBot project faced a similar problem. Its founder Shaun Newsum said that he also held an airdrop on CMC. According to him, the platform identified 30,000 winners of the airdrop. TokenBot sent out its tokens to a batch of 4,000 winners to begin with. And about 3,300 of them ended up sending funds to a single wallet. Newsum said TokenBot lost about $20k as a result of the incident.

“Obviously, some person figured out how to play on CoinMarketCap. <…> If we had sent a big batch, this whole airdrop would have been a complete disaster,” said the head of TokenBot.

However, Newsum said he had received an apology from CMC. And he was told that the company was investigating the situation and would return with an updated list of project winners.

The SaTT project team claims to have uncovered 18 other token and NFT eirdrop projects totaling $6.6 million, which have been held at CMC since July 2022, and were also allegedly “infected with scams.” These included projects such as TopGoal, OwlDAO and AgeofGods. SaTT suggested that either hackers had created multiple fake accounts on CMC, or that these were internal actions of this platform.

Explanations from CoinMarketCap

A CMC official responded to the allegations by saying that at least four of the projects named by SaTT had not yet distributed awards. And therefore, it is “impossible” that they have encountered “malicious” activity. He also noted that other than SaTT, AgeOfGods and TokenBot, no one else had complained about such problems.

However, a CMC official admits that there is a bot problem. According to him, the platform team is constantly working to improve its systems to limit this problem. To prevent bots from participating, CMC uses CAPTCHA verification and email verification. It also plans to integrate two-factor authentication.