Tokens of Solana blockchain-based social network application Chingari (GARI) dropped 87% on Monday night, prompting rumors of exploits or wrongdoings within the community.
Developers, however, said in a Wednesday statement that the drop was likely due to a single sell order of over $2 million by a large GARI holder that affected the price. They further denied any reports of an exploit or hack.
“The $GARI token was affected majorly on KuCoin,” developers said, referring to the crypto exchange. “The reason identified is the $2 million market sell order at 16:10 UTC on 4th July 2022, pushed the token price to $0.14 suddenly as the market maker didn't provide enough liquidity to handle it.”
GARI tokens plunged following a large sale on Monday night, developers say. (TradingView)
Developers said the $2 million sell order and lack of liquidity caused cascading liquidations on KuCoin, which sent prices from 71 cents to as low as 3 cents. Prices bounced to the 10 cents level in the hours afterward.
The team denied any wrongdoing. “We confirm that there was no insider trading,” developers said, linking to a blockchain wallet that holds the team’s allocated tokens.
Chingari has had more than 50 million worldwide downloads on Google Play, with its largest user base in India. The application has previously raised $19 million in a seed round with investors such as RepublicCrypto, Solana Capital and crypto exchange Kraken.