It was a wild weekend for the cryptocurrency markets, with rumors of fraud and other nefarious activities running rampant. One of the major stories was the release of a report targeted at the Arbitrum Foundation alleging fraud and manipulation of ARB’s token price.
The news spooked traders, leading to a sell-off of the token and a crash in its price. However, despite the news and the sell-off, on-chain data shows that large investors have steadily accumulated ARB as the price plummeted.
$50.5M of ARB Tokens Lost In Token Holders And Arbitrum Foundation Dispute
Between April 1 and 2, a conflict between ARB token holders and the Arbitrum Foundation resulted in a significant loss for the Arbitrum network. According to Arkham Intelligence, a company specializing in on-chain analytics, 50.5M of the allotted 750M ARB tokens were transferred.
10M ARB tokens were sent to exchanges by the foundation, while it lent 40M tokens to Wintermute, and left the other 500K tokens in a multi-sig wallet, tagged Gnosis Safe Proxy, untouched. However, the Arbitrum Foundation yielded to the community’s objections and fragmented the proposed allocation of funds into multiple plans.
Furthermore, the market was taken aback by the decentralized autonomous organization (DAO) ‘s off-chain transfer of 2.694B ARB tokens to 140 addresses, varying from 100K to 71.6M ARB tokens per address.
LookOnChain, a crypto analytics provider, discovered that one of the addresses had sent its tokens to Coinbase, suggesting potential sales. Initially locked for four years for the team, advisers, and investors, these tokens have now been transferred to centralized exchanges.
Ogle, an active Crypto Twitter member, dismissed the panic sale, claiming it was not significant.
Furthermore, Ogle suggested that the wallets holding ARB’s tokens were exchange custodian or KYC investor wallets subject to a lock-up period.
Stable ARB Whale Activity This Past Week
Zachrey Lerangis, Arkham Intelligence head of the operation, explained that the “ARB whale activity over the past week appeared stable.” He noted that the analysts at Arkham tracked an aggregate of $12M in ARB whale deposits on exchanges, a signal of selling, and $18M in withdrawals, indicating buying positions.
Wintermute is the largest holder of ARB tokens and market maker, accounting for $47M in ARB tokens. Amber Group follows closely behind as the second-largest market maker, possessing ARB tokens worth $4M.
Both entities have been providing liquidity to numerous centralized exchanges through market making. Despite the FUD, the biggest ARB whale investor, who possesses 9.94M ARB tokens, declined to sell.
This wallet even added a modest sum of 111 ARB tokens over the weekend, buying them at an average price of $1.25. Meanwhile, LookOnChain noted substantial sales from two of the top six ARB investors, who disposed of 2.054M ARB tokens worth about $2.45M.
Per a Nansen report, “smart money” accounts are the most active and successful traders. Furthermore, the amount of smart money wallets containing ARB tokens has stayed the same.
According to Messari’s crypto analysts, there has been a notable rise in the influx of stablecoins to the Arbitrum network. The analysts claim that this surge in stablecoin supply on the protocol is a sign of the augmented buying power of the ecosystem.
Nonetheless, the firm determination of whales and the rise in the buying power of the Arbitrum platform ecosystem are promising signals for Ethereum layer-2 roll-up growth.
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